August 11, 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 Second Quarter 2010 Silicon Valley Venture Capital Survey.
The Second Quarter 2010 survey analyzed the valuations and terms of venture financings for 126 technology and life science companies headquartered in the Silicon Valley that reported raising capital in the second quarter of 2010.
"During the second quarter of 2010, up rounds exceeded down rounds 55 percent to 27 percent with 18 percent flat. This was an improvement over the first quarter of 2010, when up rounds exceeded down rounds 49 percent to 32 percent, with 19 percent flat, and the fourth 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 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 30 percent average price increase for the quarter, compared to 21 percent in the first quarter of 2010.
"This was also the fourth consecutive quarter in which the Venture Capital Barometer was positive," said Kramer.
"The best performing industries in the quarter from a valuation perspective were software, internet/digital media and cleantech," added Michael Patrick, partner in the Corporate Group of Fenwick & West and co-author of the survey. "With the continued improvement in venture valuations in the second quarter, and reported improvements in the amount of venture capital invested and liquidity for venture-backed companies in the quarter, there is reason to believe that the venture environment is improving," 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 for Fenwick & West