Fenwick & West's San Francisco Bay Area Venture Capital Survey Reveals Continued Increase in Valuations in Second Quarter of 2008

Up Rounds Outpace Down Rounds for 18th Consecutive Quarter

August 18, 2008 (Mountain View, CA) – Fenwick & West LLP, one of the nation's premier law firms providing comprehensive legal services to technology and life science clients, today announced results of its Second Quarter 2008 San Francisco Bay Area Venture Capital Survey. The survey analyzed the valuations and terms of venture financings for 108 technology and life science companies headquartered in the greater Silicon Valley/San Francisco Bay Area which reported raising capital in the second quarter of 2008.

"The Fenwick & West Venture Capital Barometer™ registered a 53% average price increase for companies receiving venture capital during the quarter compared to the share price of their previous financing round," said Barry Kramer, partner in the firm and co-author of the survey.

"While companies raising venture capital in the second quarter continued to receive higher valuations than in their prior round," said Kramer, "the average increase for the first half of 2008 was the lowest six month increase since the second and third quarters of 2006.

"Companies receiving the largest increases in valuation were primarily Web 2.0 and secondarily Cleantech," he said.

Michael Patrick, survey co-author and also a partner in the firm, said that up rounds exceeded down rounds for the 18th consecutive quarter.

"Up rounds exceeded down rounds 68% to 13%, with 19% flat," said Patrick.

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.

As reported by Dow Jones VentureSource, aggregate venture investment in the U.S. during the quarter was $6.9 billion in 622 transactions, compared to $7.4 billion invested in 657 transactions in the first quarter of 2008. Acquisitions of venture-backed companies in the second quarter decreased noticeably, with 56 transactions totaling $4.7 billion, compared to 86 transactions totaling $11.3 billion in the first quarter.

Complete survey results are posted on Fenwick & West's website at

About the Survey

The Fenwick & West Quarterly Venture Capital Survey, launched by law firm partners Barry J. Kramer and Michael J. Patrick in 2002, 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 Survey complements the economic data presented in the Dow Jones VentureSource Survey and the MoneyTree™ Survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association.

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

Richard Wood
Sand Hill Partners (for Fenwick & West LLP)
Phone: 650.631.0123