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Background

Our survey analyzed the terms of 203 venture financings closed in the second quarter of 2020 by companies headquartered in Silicon Valley. The Q2 2020 survey is the first to analyze a full quarter of results since the COVID-19 pandemic caused widespread business disruptions. It follows our April 2020 and May 2020 Silicon Valley Venture Capital Flash Reports, special interim monthly reports tracking the venture capital environment during the pandemic.

Key Findings

Valuation results declined sharply from pre-pandemic peak levels

  • Up rounds exceeded down rounds 71% to 15%, with 14% flat in Q2, a decline from Q1 when up rounds exceeded down rounds 79% to 14%, with 7% flat. The percentage of up rounds was the lowest, and the percentage of flat rounds was the highest, since Q4 2016. Meanwhile, the percentage of down rounds was the highest since Q4 2017.
  • The Fenwick & West Venture Capital Barometer™ showed the average price increase declining considerably to 51% in Q2, compared with 93% in the prior quarter and a record 142% in Q4 2019.
  • The median price increase for financings was 26% in Q2, a decline from 54% in the prior quarter and a record 76% in Q4 2019.

Valuation results declined for all series types

  • Valuation results across all series of financings declined in Q2 from the prior quarter. Series B financing rounds recorded the strongest valuation results in the quarter and also weakened from the prior quarter by the least amount, while the valuation results for Series C financing rounds experienced the greatest declines.

Valuations weakened across all industries

  • The internet/digital media industry recorded the strongest valuation results in Q2, followed closely by the software industry. Nevertheless, valuation results across all industries weakened in Q2 compared with the prior quarter, with the hardware industry experiencing the greatest declines in valuation results. 

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