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Fenwick & West's San Francisco Bay Area Venture Capital Survey Shows Continued Increase in Valuations in First Quarter of 2008, Rate of Increase Declines

For 17th Consecutive Quarter, Up Rounds Outpace Down Rounds

June 5, 2008 (Mountain View and San Francisco, 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 First Quarter 2008 San Francisco Bay Area Ve​nture Capital Survey.

The survey analyzed the valuations and terms of venture financings for 107 technology and life science companies headquartered in the greater Silicon Valley/San Francisco Bay Area which reported raising capital in the first quarter of 2008.

"The results show a continued increase in the valuations of companies raising venture funding compared to their prior round," said Barry Kramer, partner in the firm and co-author of the survey, "although the amount by which valuations increased has declined in each of the past two quarters."

"The Fenwick & West Venture Capital Barometer™ showed a 49% average price increase for companies receiving venture capital during the quarter compared with the share price of their previous financing round," said Kramer. "While the increase is certainly healthy, it is the lowest percentage increase since the third quarter of 2006."

Michael Patrick, survey co-author and also a partner in the firm, pointed out that up rounds exceeded down rounds for the 17th consecutive quarter.

"Up rounds exceeded down rounds 72% to 19%, with 9% 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 $6.8 billion.

"The amount invested in the first quarter of 2008 was the lowest amount of investment since the fourth quarter of 2006," said Patrick. "An industry sector analysis shows that the decline in venture investment was primarily in the healthcare sector, with biopharmaceuticals responsible for most of the decline."

Complete survey results are posted on Fenwick & West's website at http://www​.fenwick.com/vcsurvey.

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.

Contacts

Barry J. Kramer
Fenwick & West LLP
Phone: 650.335.7278
Email: bkramer@fenwick.com

Michael J. Patrick
Fenwick & West LLP
Phone: 650.335.7273
Email: mpatrick@fenwick.com

Richard Wood
Sand Hill Partners (for Fenwick & West LLP)
Phone: 650.631.0123
Email: partners@sandhillroad.com