May 18, 2010 (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 First Quarter 2010 Silicon Valley Venture Capital Survey.
The First Quarter 2010 survey analyzed the valuations and terms of venture financings for 104 technology and life science companies headquartered in the Silicon Valley which reported raising capital in the first quarter of 2010.
"During the first quarter of 2010, up rounds exceeded down rounds 49 percent to 32 percent with 19 percent flat. This was similar to the fourth quarter of 2009, where up rounds exceeded down rounds 47 percent to 30 percent, with 23 percent flat, and the third consecutive quarter in which up rounds exceeded down rounds," said Barry Kramer, a partner in the firm 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 BarometerTM—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 21 percent average price increase for the quarter, compared to 19 percent in the fourth quarter of 2009.
"This was also the third consecutive quarter in which the Venture Capital Barometer was positive," said Kramer.
"The best performing industries in the quarter from a valuation perspective were the internet/digital media industry, and to a significantly lesser extent, the software industry," added Michael Patrick, survey co-author and also a partner at the firm. "With the continued improvement in venture valuations in the first quarter, and reported improvements in the M&A and IPO sectors for venture backed companies in the quarter, there is reason to believe that venture valuations will continue to improve," Patrick concluded.
Complete results of the survey with related discussion are posted on Fenwick & West's website.
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 the Silicon Valley/San Francisco Bay Area by providing insight into the changes in venture capital valuations and terms. Focusing exclusively on trends in venture financing and valuations, the Fenwick & West Surveys complement the economic data presented in the Dow Jones VentureSource Survey and the MoneyTreeTM 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 J. Kramer
Fenwick & West LLP
Michael J. Patrick
Fenwick & West LLP
The Hoffman Agency