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Silicon Valley Venture Capital Survey – Second Quarter 2018

Full Analysis


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Background

We analyzed the terms of 225 venture financings closed in the second quarter of 2018 by companies headquartered in Silicon Valley.

Key Findings


Up Rounds Dominate, with Average Price Increases Declining

Valuation results continued to be strong in Q2 2018, but declined moderately compared to the prior quarter.

  • Up rounds exceeded down rounds 78% to 12%, with 10% flat in Q2 2018, an increase from Q1 when up rounds exceeded down rounds 75% to 15%, with 10% flat.
  • The Fenwick & West Venture Capital Barometer™ showed an average price increase in Q2 2018 of 70%, a moderate decrease from the 74% recorded in the prior quarter, and the first quarter in which the average price increase had declined compared to the prior quarter since Q4 2016.
  • The median price increase of financings in Q2 2018 was 37%, a decrease from the 41% recorded in Q1.

Series B Financings Show Strongest Valuation Results

  • Series B financings recorded the strongest valuation results in Q2 2018, with an average price increase of 117%, an increase from 92% in Q1, and a median price increase of 66%, an increase from 49% in Q1.
  • Series C financings recorded the weakest valuation results in the quarter and the greatest declines, with the average price increase declining from 81% in Q1 to 36% in Q2, and the median price increase declining from 53% in Q1 to 22% in Q2.

Software Industry Notches Strongest Valuation Results

  • The software industry recorded the strongest valuation results in Q2 2018, with an average price increase of 85% and a median price increase of 46%, both moderately higher compared to the prior quarter.
  • The valuation results for the internet/digital media industry, while still strong in comparison to the other industries, recorded the greatest declines in the quarter, with the average price increase declining from 101% in Q1 to 61% in Q2 and the median price increase declining from 59% in Q1 to 25% in Q2.

Download the full report covering top-line trends for venture capital financings of Silicon Valley companies in Q2.



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