September 2, 2020
Venture Capital: Silicon Valley Venture Capital Survey
Fenwick & West recently published its Silicon Valley Venture Capital Survey for the second quarter of 2020. The survey analyzed the terms of 203 Silicon Valley venture financings closed during the second quarter, and is the first to analyze a full quarter of results since the COVID-19 pandemic hit. Here are some of the highlights:
– Up rounds exceeded down rounds 71% to 15%, with 14% flat in Q2, a decline from Q1 when up rounds exceeded down rounds 79% to 14%, with 7% flat. The percentage of up rounds was the lowest, and the percentage of flat rounds was the highest, since Q4 2016. Meanwhile, the percentage of down rounds was the highest since Q4 2017.
– The median price increase for financings was 26% in Q2, a decline from 54% in the prior quarter and a record 76% in Q4 2019.
– Valuation results across all series of financings declined in Q2 from the prior quarter. Series B financing rounds recorded the strongest valuation results in the quarter and also weakened from the prior quarter by the least amount, while the valuation results for Series C financing rounds experienced the greatest declines.
The internet/digital media industry provided the strongest valuation results during the second quarter, with the software industry following close behind. But valuation results across all industries weakened in Q2 compared with the prior quarter, with the hardware industry experiencing the greatest declines in valuation results. The firm’s data showed that the average price increase declined considerably to 51% in Q2, compared with 93% in the prior quarter and a record 142% in Q4 2019.
– John Jenkins