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For more than four decades, Fenwick & West LLP has helped some of the world’s most recognized companies become, and remain, market leaders. From emerging enterprises to large public corporations, our clients are leaders in the technology, life sciences and cleantech sectors and are fundamentally changing the world through rapid innovation.  MORE >

Fenwick & West was founded in 1972 in the heart of Silicon Valley—before “Silicon Valley” existed—by four visionary lawyers who left a top-tier New York law firm to pursue their shared belief that technology would revolutionize the business world and to pioneer the legal work for those technological innovations. In order to be most effective, they decided they needed to move to a location close to primary research and technology development. These four attorneys opened their first office in downtown Palo Alto, and Fenwick became one of the first technology law firms in the world.  MORE >

From our founding in 1972, Fenwick has been committed to promoting diversity and inclusion both within our firm and throughout the legal profession. For almost four decades, the firm has actively promoted an open and inclusive work environment and committed significant resources towards improving our diversity efforts at every level.  MORE >

At Fenwick, we are proud of our commitment to the community and to our culture of making a difference in the lives of individuals and organizations in the communities where we live and work. We recognize that providing legal services is not only an essential part of our professional responsibility, but also an excellent opportunity for our attorneys to gain valuable practical experience, learn new areas of the law and contribute to the community.  MORE >

Year after year, Fenwick & West is honored for excellence in the legal profession. Many of our attorneys are recognized as leaders in their respective fields, and our Corporate, Tax, Litigation and Intellectual Property Practice Groups consistently receive top national and international rankings, including:

  • Named Technology Group of the Year by Law360
  • Ranked #1 in the Americas for number of technology deals in 2015 by Mergermarket
  • Nearly 20 percent of Fenwick partners are ranked by Chambers
  • Consistently ranked among the top 10 law firms in the U.S. for diversity
  • Recognized as having top mentoring and pro bono programs by Euromoney

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We take sustainability very seriously at Fenwick. Like many of our clients, we are adopting policies that reduce consumption and waste, and improve efficiency. By using technologies developed by a number of our cleantech clients, we are at the forefront of implementing sustainable policies and practices that minimize environmental impact. In fact, Fenwick has earned recognition in several areas as one of the top US law firms for implementing sustainable business practices.  MORE >

At Fenwick, we have a passion for excellence and innovation that mirrors our client base. Our firm is making revolutionary changes to the practice of law through substantial investments in proprietary technology tools and processes—allowing us to deliver best-in-class legal services more effectively.   MORE >

Mountain View Office
Silicon Valley Center
801 California Street
Mountain View, CA 94041
650.988.8500

San Francisco Office
555 California Street
13th Floor
San Francisco, CA 94104
415.875.2300

Seattle Office
1191 Second Avenue
10th Floor
Seattle, WA 98101
206.389.4510

New York Office
1211 Avenue of the Americas
32nd Floor
New York, NY 10036
212.921.2001

Shanghai Office
Unit 908, 9/F, Kerry Parkside Office
No. 1155 Fang Dian Road
Pudong New Area, Shanghai 201204
P.R. China
+86 21 8017 1200


Private Company Valuations are Not Comparable to Public Company Valuations

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There has been a great deal written about the growing number of venture backed companies with billion-dollar valuations. While valuations are clearly high (see our recent survey at www.fenwick.com/vcsurvey​ for details) discussions about venture valuations can be misleading, because the valuation of a venture backed company needs to be analyzed very differently than the valuation of a public company.

The reason for this is that in a venture backed company investors receive preferred stock, which gives them important rights that holders of common stock (which is the type of stock issued in IPOs) don't receive. So it's important to understand those additional rights to understand a private company's valuation.

For example, preferred stock almost always entitles the investor to a liquidation preference, which provides that the investor is entitled to receive its entire investment back before common stock holders such as management and employees are entitled to receive any return, and in most cases before other investors are entitled to receive any gain on their investment.

This can have huge implications. For example CBInsights​ has recently listed the 10 highest value VC backed companies. These companies had an aggregate valuation of $122B, and an aggregate amount invested in them of $12.1B, approximately 10% of their valuation.

This means that, because of the preferred stock liquidation preference, these companies could fall an average of 90% in value before their investors lost any of their money.

And there are other types of preferred stock terms, such as anti-dilution protection, IPO auto convert thresholds and senior liquidation preference, that can also be used to reduce the downside of a late-stage, high valuation investor.

So while there are certainly a number of VC backed companies receiving very high valuations, it is important to not compare these valuations to public company valuations, where the investor owns common stock, and a 90% decrease in the value of the company means the investor loses 90% of its investment.

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