Summary of the 4Q14 Fenwick & West VC Survey

Because I was reading it and had a minute, I thought I’d do a quick post summarizing the 4Q14 Fenwick & West Silicon Valley Venture Capital Survey (PDF).  As the name indicates, this is an ongoing quarterly survey  on the state of venture capital that pulls from many sources, integrating lots of data into a single picture.

Some highlights (glossary here):

  • Up rounds exceeded down rounds 79% to 6%, with 15% of rounds flat.
  • Average price up 115% in 4Q14, compared to 79% in 3Q14, and the highest value they’ve recorded since they started measuring this in 2005.  (Yes Virginia, prices are good.)
  • 50% of deals were in software companies
  • $14 B was invested in US VC-backed companies in 4Q14, the highest post-bubble amount yet.  (However, remember that during Bubble 1.0, the peak ran around $25B+/quarter.)
  • $49B was invested on the year.  (And you wonder why traffic so bad on 101.)
  • There were 21 VC-backed IPOs in 4Q14 which raised $3B, and 105 on the year.
  • There were 102 acquisitions of VC-backed companies for a total price of $32B in 4Q14 and 531 such deals on the year.
  • $33B was raised by VC funds in 2014, hitting 2005-2007 levels, but not coming close to the $106B raised in 2000.
  • China passed Europe in terms of VC funding raised, tripling from less than $5B in 2013 to more than $15B in 2014.  India more than doubled going from $2B to $5B.
  • Corporate venture capitalists invested $5B in 2014, the highest amount since 2000 (where it was $15B).
  • There are currently 225 accelerators worldwide which have assisted 4264 companies.  AngelList reported over $100M was raised in 2014 across 243 startups.  (This all contributes to a system imbalance where it’s relatively too easy to get angel money, resulting in a fairly large die-off rate between angel round and series A.)
  • When classifying VC deals by the university the CEO attended and then grouping by athletic conferences, the rankings go:  Pac 12, Ivy League, Big Ten, ACC, Big Tweleve, and SEC.  (I did my part for the Pac 12 in 4Q14 — Go Bears!)
  • The Silicon Valley Venture Capitalist Confidence Index published by USF reported confidence of 3.93 in 4Q14, up from 3.89 in 3Q14, and above the (eleven-year) average of 3.72.  Full report here.
  • 19% of rounds had a senior liquidation preference (to existing preferred, not just the common).  Reminder:  glossary here.
  • Only 5% of rounds had senior multiple liquidation preference.
  • 20% of rounds had participation in liquidation, down from a recent high of 34% in 2Q13.  53% of those that had participation, had it uncapped.
  • 5% of rounds had pay-to-play provisions.
  • 13% had redemption rights.

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