Highlights from the Fenwick & West 3Q18 Venture Capital Survey

It’s been a few years since I wrote about this survey, which I post about less to communicate recent highlights and more to generate awareness of its existence.  The Fenwick & West Venture Capital Survey is must-read material for any entrepreneur or startup CEO because it not only makes you aware of trends in financing, but also provides an excellent overview of venture capital terminology as well as answering the important question of “what’s normal” in today’s venture funding environment (also known as “what’s market.”)

So if you’re not yet subscribed to it, you can sign up here.

3Q18 F&W Venture Capital Survey Highlights

  • 215 VC financing rounds were closed by companies with headquarters in Silicon Valley
  • Up rounds beat down rounds 78% to 9%
  • The average price increase (from the prior round) was 71%
  • 24% of rounds had a senior liquidation preference
  • 8% of rounds had multiple liquidation preferences
  • 11% of rounds has participation
  • 6% of rounds had cumulative dividends
  • 98% of rounds had weighted-average anti-dilution provisions
  • 2% of rounds had pay-to-play provisions
  • 6% of rounds had redemption rights

In summary, terms remained pretty friendly and valuations high.  Below is Fenwick’s venture capital barometer which focuses on price changes from the prior financing round.  It’s a little tricky to interpret because the amount of time between rounds varies by company, but it does show in any given quarter what the price difference is, on average, across all the financings closed in that quarter.  In 3Q18, it was 71%, slightly down from the prior quarters, but well above the average of 57%.

vc barometer

 

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