Silicon Valley Venture Capital Survey – Third Quarter 2018

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We analyzed the terms of 215 venture financings closed in the third quarter of 2018 by companies headquartered in Silicon Valley. We found that Series B financings and the life sciences industry showed the strongest valuation results.

Key Findings

Up Rounds Continue to Dominate, Valuation Metrics Plateau

Valuation results were generally flat in Q3 2018 compared to the prior quarter. Overall, valuation metrics remain strong and are above historical averages, but have plateaued since Q3 2017.

  • Up rounds exceeded down rounds 78% to 9%, with 13% flat in Q3 2018, a moderate improvement from Q2.
  • The Fenwick & West Venture Capital Barometer™ showed an average price increase in Q3 2018 of 71%, a slight increase from the 70% recorded in the prior quarter.
  • The median price increase of financings in Q3 2018 was 42%, a moderate hike from the 37% recorded in Q2.

Series B Financings Continue to Show Strongest Valuations

  • Series B financings recorded the strongest valuation results in Q3 2018, although the average price increase declined from 117% in Q2 to 92% in Q3, while the median price increase was up moderately from 66% in Q2 to 68% in Q3.
  • Series C and D financings both recorded strong gains in valuation results in Q3, while Series E financings recorded the weakest valuation results in the quarter.

Life Sciences Industry Scores Strongest Valuations

  • The life sciences industry recorded the strongest valuation results in Q3 2018 and the greatest gain from the prior quarter, with an average price increase of 110%, up from 63% in Q2, and a median price increase of 44%, up from 19% in Q2.
  • The software industry recorded the greatest decline in valuation results in Q3, while the hardware industry had the weakest valuation results in the quarter.

Download the full report covering top-line trends for venture capital financings of Silicon Valley companies in Q3.

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