Mountain View, CA (November 17, 2015) – Fenwick & West LLP, one of the nation’s premier law firms providing comprehensive legal services to high technology and life sciences clients, today announced the results of its Third Quarter 2015 Silicon Valley Venture Capital Survey.
The survey analyzed the valuations and terms of venture financings for 175 technology and life sciences companies headquartered in the Silicon Valley that raised capital in the third quarter of 2015.
“During the third quarter of 2015, up rounds exceeded down rounds 86% to 4%, with 10% flat. This was a small increase from the second quarter of 2015 when up rounds exceeded down rounds 83% to 8%, with 9% flat. The 82 point difference between up and down rounds was the largest since we began the survey in 2002," said Barry Kramer, partner in the Corporate Group of Fenwick & West and 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 average percentage change in share price of companies funded during the quarter compared with the share price of their previous financing round – showed a strong 116% average price increase for the quarter. The result was impacted by one non-tech financing that was up over 3000% compared to the company's prior round. Excluding this financing would have yielded a still strong Barometer result of 93% for the quarter. The Barometer result for the second quarter of 2015 was 107%. The median price increase of the financings in the third quarter was 51%, a decrease from the 74% recorded in the second quarter, but still solid.
“The best performing industries in the quarter from a valuation perspective were software (which had over 50% of the deals) and internet/digital media, which had on average 88% and 107% increases in valuation, respectively,” continued Kramer. “The hardware and life sciences industries trailed, but still had solid results in the quarter.”
“At the big picture level, the third quarter of 2015 was a very strong quarter, but a little less strong overall than the second quarter of 2015,” Kramer added.
Complete results of the survey with related discussion are posted on Fenwick & West’s website at www.fenwick.com/vcsurvey.
About the Survey
The Fenwick & West Quarterly Venture Capital Survey, authored by law firm partner Barry J. Kramer, has been published for over 13 years and offers a unique view of the venture capital market in Silicon Valley by providing insight into the changes in venture capital valuations and terms. Focusing on trends in venture financing and valuations, the Fenwick & West Survey complements the economic data presented by Dow Jones VentureSource, the MoneyTree™ Report by PricewaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters, and CB Insights.
About Fenwick & West
Fenwick & West provides comprehensive legal services to ground-breaking technology and life sciences companies – at every stage of their lifecycle – and the investors that partner with them. We craft innovative, cost-effective and practical solutions on issues ranging from venture capital, public offerings, joint ventures, M&A and strategic relationships, to intellectual property, litigation and dispute resolution, taxation, antitrust, and employment and labor law. For more than four decades, Fenwick has helped some of the world's most recognized companies become and remain market leaders. For information about a career at Fenwick visit us at fenwick.com/careers.