Silicon Valley Venture Survey: First Quarter 2014
The Harvard Law School Forum on Corporate Governance and Financial Regulation 2014-05-20
Editor's Note: The following post comes to us from Barry J. Kramer, partner in the corporate and securities group at Fenwick & West LLP and is based on a Fenwick publication by Mr. Kramer and Michael J. Patrick; the full publication, including expanded detailed results and valuation data, is available here.We analyzed the terms of 156 venture financings closed in the first quarter of 2014 by companies headquartered in Silicon Valley.
Overview of Fenwick & West Results
Valuation results in 1Q14 were very strong.
- Up rounds exceeded down rounds 76% to 8% with 16% flat. The 68 point difference between up and down rounds was the largest since 2Q07, when the spread was 70 points
- The Fenwick & West Venture Capital Barometer™ showed an average price increase of 85%, a significant increase from 57% in 4Q13.
- The median price increase of financings in 1Q14 was 52%, a significant increase from 27% in 4Q13 and the highest amount since we began calculating medians in 2004.
- Software and internet/digital media continued to be the strongest industry sectors, with life science, cleantech and hardware lagging but showing respectable results. The percentage of all financings that are for software companies has trended up in recent years, hitting 45% in this quarter.
- The use of senior liquidation preference fell for the third quarter in a row, an indication of companies having leverage in negotiations with investors.