Highlights from the Fenwick & West Venture Trends Report

Just a quick post to highlight some interesting facts from Fenwick & West’s (F&W’s) quarterly Silicon Valley venture capital survey.

  • Valuations are up.  Up-rounds beat down rounds 55% to 27%, with flat rounds making up the difference.  F&W’s venture capital barometer showed an average price increase of 30%.
  • DowJones VentureSource reported that $7.7B of VC was invested in the US in 2Q10 across 744 deals.
  • VentureSource reported 79 acquisitions of VC-backed firms, for a total value of $4.3B
  • There were 17 VC-backed firms that executed an IPO in 2Q10, compared to 9 in 1Q10
  • Fundraising by VCs declined in 2Q10, with 38 firms raising $1.9B, compared to 38 firms raising $3.7B in 1Q10
  • 90% of VCs surveyed expect the number of venture firms to decrease between now and 2015.  (I suppose they all think it’s the “other guys” who are going to fold.)  Reasons cited include:  difficultly in achieving successful exits, unfavorable tax policy, and an unstable regulatory environment
  • The Silicon Valley Venture Capitalist Confidence Index produced by USF professor Mark Cannice declined to 3.28 in 2Q10 from 3.65 in 1Q10, breaking a five-quarter streak of increases.  The drop was attributed to shocks from the macro economy and shocks to the venture industry itself.
  • 18% of rounds in 2Q10 were A rounds
  • 27% of rounds were up rounds
  • Of down rounds, D rounds led by series at 36% of down rounds
  • Software had 34 financings with 73% up and a barometer increase of 51%
  • Internet and digital media had 23 financings with 52% up and a barometer increase of 43%
  • 40% of rounds had liquidation preferences
  • 17% of those rounds with preference had multiple liquidation preferences, 71% of those were in the half-closed interval (1,2]x
  • 35%  of rounds had participating preferences
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