Fenwick & West Releases the First Angel/Seed Financing Survey for the Internet/Digital Media and Software Industries

April 7, 2011 (Mountain View, CA) – Fenwick & West LLP, one of the nation’s preeminent law firms providing comprehensive legal services to high technology and life science clients, today released its first Angel/Seed Financing Survey.

The survey covers 52 internet/digital media and software companies that raised angel/seed financing in the Silicon Valley or Seattle markets in 2010. For purposes of the survey, an "angel/seed financing" is the first round of financing of a company in which it raised between $250,000 and $2 million and is led by a professional investor.

“In 2002, we began publishing our Venture Capital Survey in response to the change in market conditions resulting from the burst of the 'dot-com bubbl' and a desire to provide the entrepreneurial community with objective information about the status of the venture environment,” said Barry Kramer, a partner in the firm's Corporate Group. "We believe that in recent years, the angel/seed financing environment has undergone significant changes for mostly unrelated reasons, especially in the internet/digital media and software industries, where entrepreneurs can develop and begin commercializing products with less resources than other industries. As a result we decided to develop and publish a survey to analyze market conditions and changes in that environment," explained Mr. Kramer.

Some of the results of the survey are as follows:

  • Seed stage funds led 45% of the financings, individual angels led 31% of the financings and venture capital funds led 24% of the financings.
  • A larger percentage of the financings were structured as preferred stock financings as opposed to convertible note financings, and those that were structured as convertible note financings capped the conversion price in substantially over a majority of the financings.
  • The median amount raised in preferred stock financings was $1.1 million, and $0.6 million in convertible note financings.
  • The median pre-money valuation for preferred stock financings was $3.4 million for internet/digital media financings and $2.7 million for software financings.
  • Investors received a board seat in approximately 70% of preferred stock financings, but in less than 10% of convertible note financings.

"We believe these results are consistent with our anecdotal observation that angel financings have become more sophisticated and larger in the internet/digital media and software industries in recent years, as the class of investors between 'friends and family' investors and traditional venture capital has developed and expanded," said Steve Levine, who is also an attorney in the firm's Corporate Group. "We view this as a healthy response to changing market conditions, and intend to continue to follow these trends," concluded Mr. Levine.

Complete results of the survey are available at

About Fenwick & West

Established in 1972, Fenwick & West LLP is one of the nation’s preeminent law firms with extensive expertise in venture capital, public offerings and other corporate finance, joint ventures, M&A and strategic relationships, intellectual property, litigation and dispute resolution, taxation, antitrust and employment and labor law.


Barry Kramer
Fenwick & West LLP
Phone: 650.335.7278

Steve Levine
Fenwick & West LLP
Phone: 650.335.7847

Merredith Branscombe
Le@p! Public Relations
Phone: 702.235.7353