Mountain View, CA (February 22, 2016) – Fenwick & West LLP, one of the nation’s premier law firms providing comprehensive legal services to high technology and life sciences clients, today announced the results of its Fourth Quarter 2015 Silicon Valley Venture Capital Survey.
The survey analyzed the valuations and terms of venture financings for 152 technology and life sciences companies headquartered in the Silicon Valley that raised capital in the fourth quarter of 2015.
“During the fourth quarter of 2015, up rounds exceeded down rounds 82% to 12%, with 6% flat. This was a decrease from the very strong third quarter of 2015 when up rounds exceeded down rounds 86% to 4%, with 10% flat," said Barry Kramer, partner in the Corporate Group of Fenwick & West and author of the survey.
An up round is one in which the price per share at which a company sells its stock has increased since its prior financing round. Conversely, a down round is one in which the price per share has declined since a company’s prior financing round.
The Fenwick & West Venture Capital Barometer™ – which measures the average percentage change in share price of companies funded during the quarter compared with the share price of their previous financing round – showed a solid 70% average price increase for the quarter, although this was a decline from the 116% recorded in the third quarter of 2015, and the lowest amount since the fourth quarter of 2013. The median price increase of the financings in the fourth quarter was 39%, a decrease from the 51% recorded in the third quarter and the 74% recorded in the second quarter.
“The two best performing industries in the fourth quarter from a valuation perspective were the internet/digital media and hardware industries,” continued Kramer. “This was the first quarter since 2010, when we began tracking data by industry, that the software industry was not in the top two industries, as it was third this quarter, although it accounted for 48% of all deals.”
Complete results of the survey with related discussion are posted on Fenwick & West’s website at www.fenwick.com/vcsurvey.
About the Survey
The Fenwick & West Quarterly Venture Capital Survey, authored by law firm partner Barry J. Kramer, has been published for over 14 years and offers a unique view of the venture capital market in Silicon Valley by providing insight into the changes in venture capital valuations and terms. Focusing on trends in venture financing and valuations, the Fenwick & West Survey complements the economic data presented by Dow Jones VentureSource, the MoneyTree™ Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters, and CB Insights.
About Fenwick & West
Fenwick & West provides comprehensive legal services to ground-breaking technology and life sciences companies – at every stage of their lifecycle – and the investors that partner with them. We craft innovative, cost-effective and practical solutions on issues ranging from venture capital, public offerings, joint ventures, M&A and strategic relationships, to intellectual property, litigation and dispute resolution, taxation, antitrust, and employment and labor law. For more than four decades, Fenwick has helped some of the world's most recognized companies become and remain market leaders. For information about a career at Fenwick visit us at fenwick.com/careers.