Silicon Valley Venture Capital Survey Reveals Healthy But Lower Trending Valuations in Second Quarter of 2013

Mountain View, CA (August 19, 2013) – Fenwick & West, 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 Second Quarter 2013 Silicon Valley Venture Capital Survey.

The survey analyzed the valuations and terms of venture financings for 124 technology and life science companies headquartered in the Silicon Valley that raised capital in the second quarter of 2013.

"During the second quarter of 2013, up rounds exceeded down rounds 64% to 22%, with 14% flat. This was a decline from the first quarter of 2013, when up rounds exceeded down rounds 68% to 11%, with 21% flat," 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 percentage change in share price of companies funded during the quarter compared with the share price of their previous financing round – showed a 62% average price increase for the quarter, a slight increase from the 57% reported in the first quarter of 2013. Similarly, the median price increase of those financings was 19%, a slight increase from the 14% recorded in the first quarter.

"While the overall results are healthy, the doubling of the number of down rounds from the first quarter to second quarter, and the relatively low median price increase of 17% in the first half of 2013, compared to 30% in 2012, bears watching," said Kramer.

"The best performing industries in the quarter from a valuation perspective were software, internet/digital media, and hardware, with life sciences lagging," added Michael Patrick, partner in the Corporate Group of Fenwick & West and co-author of the survey.

"At the big picture level, it was a mixed quarter for the venture environment, with venture investing and IPOs up compared to the first quarter of 2013, but acquisitions and venture fund raising down. But with the macro environment appearing to stabilize, Nasdaq up both in the first quarter and second quarter to date, the growth of disruptive technologies such as cloud and mobile, and strengthening in the life science IPO market, there is reason to be optimistic about the venture environment," 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, has been published for over 11 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 exclusively on trends in venture financing and valuations, the Fenwick & West Survey complements 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 Kramer
Fenwick & West LLP
Phone: 650.335.7278

Michael Patrick
Fenwick & West LLP
Phone: 650.335.7273