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Have We Entered a Tech Bubble?

March 05, 2015

​Fenwick & West corporate partner Barry Kramer was quoted by Bloomberg in an article looking at whether the huge sums being raised by technology start-ups are evidence of a developing tech boom, as Spark Capital's Todd Dagres claimed recently.

Rather than a bubble, Kramer said, we are experiencing a "period of selective exuberance, with the winners taking all."

Kramer cited Fenwick's 4Q14 Silicon Valley Venture Capital Survey, which he co-wrote, in making his case.

The survey indicates that the dollar amount venture capitalists invested in tech start-ups last year, $50 billion, was the highest since 2000, Kramer said. Nevertheless, he explained, the $50 billion total – and the number of companies receiving financing last year – were only about 50 percent of what they were in 2000.

In the article, Bloomberg noted – as The Recorder did in its recent profile of the firm's "blockbuster year" in 2014 – that Fenwick guided five of last year's 10 largest VC-backed exits, including Facebook's $19 billion acquisition of WhatsApp and LendingClub Corp.'s $1 billion initial public offering.