Fenwick & West's Venture Capital Barometer™ Reveals 17% Increase in First Quarter

May 20, 2004 (Mountain View, CA) - Business Wire - Fenwick & West LLP, one of the nation's premier firms providing comprehensive legal services to high technology and life science clients, today announced the introduction of the Fenwick & West Venture Capital Barometer™ as part of its quarterly venture capital survey.

The Barometer measures the change in valuation of companies compared to their prior financing round. For the first quarter of 2004 the Barometer shows that the average Silicon Valley-based company that received venture funding during the quarter saw its per share valuation increase 17% over its prior financing round.

The information is contained in Fenwick & West's just-released First Quarter 2004 Silicon Valley/San Francisco Bay Area Venture Capital Survey

"In the current survey, we report on the extent of price changes for the first time," said Barry J. Kramer, survey co-author. "This new feature provides detailed information on the amount of change in valuations of Silicon Valley companies, and complements the information that we continue to provide on the other terms of such financings."

"The number of up rounds in the first quarter increased to the highest levels we have seen since we launched the survey over two years ago," added Michael J. Patrick, co-author of the survey. "In the first quarter of 2004, 51% of all Silicon Valley venture financing deals were up rounds, 30% were down rounds, and 19% were flat. This is the first quarter since we began the survey over two years ago that up rounds outpaced down rounds."

Kramer continued, "These first quarter 2004 results show that investor confidence has improved considerably over prior quarters. That said, we need to be careful not to overstate the importance of these comparative results, as most of the companies that raised funding during this past quarter last raised funds 12 – 24 months ago, when valuations were depressed. But we're clearly moving in the right direction."

The survey also demonstrated continuing improvement in other financing terms, indicating that VC investment in Bay Area start-ups is progressing at a more confident pace.

Fenwick & West LLP analyzed the terms and valuations of venture financings for 126 technology companies headquartered in the Silicon Valley/San Francisco Bay Area that reported raising capital in the first quarter of 2004. The Survey, which focuses on trends in venture financing terms and valuations, complements the economic data presented in the Ernst & Young/Venture One U.S. Venture Capital Survey and the PricewaterhouseCoopers/Thomson Venture Economics/National Venture Capital Association MoneyTree™ Survey.

Complete survey results are posted on the Fenwick & West website. Please visit for full results.

About the Fenwick & West Survey

The Fenwick & West Quarterly Venture Capital Survey, co-authored by 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 terms and valuations. 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
Phone: 650.631.0123