Fenwick & West's Silicon Valley Venture Capital Survey Reveals Improved Valuations in First Quarter of 2011 – Largest Amount By Which Up Rounds Exceeded Down Rounds in 3.5 Years

June 8, 2011 (Mountain View, CA) Fenwick & West LLP, one of the nation's premier law firms providing comprehensive legal services to high technology and life science clients, today announced the results of its First Quarter 2011 Silicon Valley Venture Capital Survey.

The First Quarter 2011 survey analyzed the valuations and terms of venture financings for 122 technology and life science companies headquartered in the Silicon Valley that reported raising capital in the first quarter of 2011.

"During the first quarter of 2011, up rounds exceeded down rounds 67% to 16% with 17% flat. This was similar to the fourth quarter of 2010, when up rounds exceeded down rounds 67% to 21%, with 17% flat, and the seventh consecutive quarter in which up rounds exceeded down rounds," said Barry Kramer, partner in the Corporate Group of Fenwick & West and co-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 change in share price of Silicon Valley companies funded during the quarter compared with the share price of their previous financing round - showed a 52% average price increase for the quarter, less than the 61% reported in the fourth quarter of 2010, but still very healthy.

"This was also the seventh consecutive quarter in which the Venture Capital Barometer was positive," said Kramer.

"The best performing industries in the quarter from a valuation perspective were software (including a significant number of 'software as a service' companies and companies building applications for mobile devices) and Internet/Digital Media, followed by hardware and cleantech, while the life science industry continued to lag," added Michael Patrick, partner in the Corporate Group of Fenwick & West and co-author of the survey.

"As reported by third party sources, the first quarter saw a significant increase in commitments to venture capital funds, reversing the trend that began in early 2009 of venture capitalists investing significantly more in companies than the amount of new funds committed to such venture funds. With an improving venture environment there are reasons to believe this trend will continue," added Patrick.

Complete results of the survey with related discussion are posted on Fenwick & West's website at

About the Survey

The Fenwick & West Quarterly Venture Capital Survey, co-authored by law firm partners Barry J. Kramer and Michael J. Patrick, offers a unique view of the venture capital market in the Silicon Valley/San Francisco Bay Area by providing insight into the changes in venture capital valuations and terms. Focusing exclusively on trends in venture financing and valuations, the Fenwick & West Surveys complement the economic data presented in the Dow Jones VentureSource Survey and the MoneyTree Report™ by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.

About Fenwick & West

Established in 1972, Fenwick & West LLP is one of the nation's premier 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 J. Kramer
Fenwick & West LLP
Phone: 650.335.7278

Michael Patrick
Fenwick & West LLP
Phone: 650.335.7273

Merredith Branscombe
Le@p! Public Relations
Phone: 720.235.7363