Fenwick & West's Silicon Valley Venture Capital Survey — Reveals Increase in Valuations in Third Quarter of 2009

November 11, 2009 (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 results of its Third Quarter 2009 Silicon Valley Venture Capital Survey.

The survey analyzed the valuations and terms of venture financings for 103 technology and life science companies headquartered in the greater Silicon Valley/San Francisco Bay Area which reported raising capital in the third quarter of 2009.

"During the third quarter, up rounds exceeded down rounds 41% to 36% with 23% flat. This was the first quarter in 2009 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 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 an 11% average price increase for the quarter.

"This was also the first quarter in 2009 in which the Venture Capital Barometer was positive," said Kramer. "When taken together with the increase in up rounds, venture valuations in Silicon Valley appear to be improving."

"The venture financing environment is sending mixed signals," said Michael Patrick, survey co-author and also a partner in the firm. "Although fundraising by venture capitalists, investments by venture capitalists and liquidity for venture backed companies remained at relatively low levels in 3Q09, there is room for optimism as Nasdaq continued to improve, valuations are slowly increasing and anecdotal evidence indicates that the M&A and IPO markets are improving."

Complete results of the survey with related discussion can be found 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 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 J. Kramer
Fenwick & West LLP
Phone: 650.335.7278

Michael J. Patrick
Fenwick & West LLP
Phone: 650.335.7273

Lerin O'Neill
The Hoffman Agency
Phone: 408.832.7083