Fenwick & West's Silicon Valley Venture Capital Survey Reveals Continued Strong Valuations in Third Quarter of 2011 – Strength Primarily in Internet and Software Industries

November 17, 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 Third Quarter 2011 Silicon Valley Venture Capital Survey.

The Third Quarter 2011 survey analyzed the valuations and terms of venture financings for 113 technology and life science companies headquartered in the Silicon Valley that reported raising capital in the third quarter of 2011.

"During the third quarter of 2011, up rounds exceeded down rounds 70% to 15% with 15% flat. This was an increase from the second quarter of 2011, when up rounds exceeded down rounds 61% to 25%, with 14% flat. Series B rounds were especially strong with 89% up rounds. This was the ninth 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 69% average price increase for the quarter, a slight decrease from the 71% reported in the second quarter of 2011. Additionally, one of the companies in the internet/digital media industry had a 1,500% up round, and were this company excluded the Barometer would have been 54% for the quarter.

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

"The best performing industries in the quarter from a valuation perspective were internet/digital media and software (including a significant number of "software as a service" companies and companies building applications for mobile devices), which substantially outpaced the other industries, 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.

"The third quarter of 2011 was a mixed quarter for the venture capital industry, with healthy valuations, solid amounts of investing and an improved M&A environment. However fundraising by venture funds, IPOs, venture capitalists' confidence level and Nasdaq, were all off significantly. Nasdaq has recovered significantly in 4Q11 to date, and Groupon had a successful IPO, but the macro environment continues to be unpredictable, and accordingly the future direction of the venture environment is uncertain," 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 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

Merredith Branscombe
Le@p! Public Relations
Phone: 720.235.7363