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Silicon Valley Venture Capital Survey – First Quarter 2019

First Look
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Background

We analyzed the terms of 185 venture financings closed in the first quarter of 2019 by companies headquartered in Silicon Valley. We found that valuation results continued to be strong, with the average price increase in Q1 slightly lower than in the prior quarter, though still substantially higher than the historical average. The internet/digital media software industry recorded the strongest valuation results.

Key Findings


Valuation Results Strong, but Declined from Three-Year Highs of Prior Quarter

  • Up rounds exceeded down rounds 81% to 11%, with 8% flat in Q1 2019, a moderate increase in the percentage of down rounds compared to the prior quarter when up rounds exceeded down rounds 81% to 8%, with 11% flat.
  • The Fenwick & West Venture Capital Barometer™ showed an average price increase in Q1 2019 of 75%, a decline from the 85% recorded in the prior quarter, but still substantially higher than the historical average of 58%.
  • Despite the decline in the average price increase, the median price increase of financings rose from 52% in Q4 2018 to 56% in Q1 2019, the highest median price increase since Q2 2015.

Valuation Results Declined for Each Financing Series

  • Moderately weaker valuation results compared to the prior quarter were recorded across each series of financing.

Internet/Digital Media Software Industry Showed Strongest Valuations

  • The internet/digital media software industry recorded the strongest valuation results in Q1 2019, with an average price increase of 102%.
  • The software industry had the next strongest valuation results in the quarter despite recording the greatest decline in average price increase compared to the prior quarter.
  • The hardware and life sciences industry also recorded weaker valuation results in Q1 compared to the prior quarter.

 

Download the full report covering top-line trends for venture capital financings of Silicon Valley companies in Q1.


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