Silicon Valley venture capitalists tempered their enthusiasm for investing in the first quarter, though only modestly, as software and Internet startups continued to spark spirited check writing, according to a study from Fenwick & West.
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Valuations are strong for venture-backed enterprise companies and Internet startups with top prospects. What about health care? Turns out 2012 was a relatively solid year there, too. Up rounds outpaced down rounds 52% to 17% over the 12 months.
Fenwick & West’s annual seed financing study found that the Series A crunch has worsened. The survey found that 45% of companies receiving seed funding in 2010 raised a Series A funding by the end of 2011. But only 27% of companies receiving seed funding in 2011 had raised a Series A funding by the end of 2012. What’s more, nearly a quarter of companies funded in 2011 raised follow-on seed financing compared with just 12% the year before.
Fenwick & West released a new version of its Series Seed documents on GitHub. The law firm first released its term sheet documents in 2010 and says they have been used by many startups and some Silicon Valley venture capital firms. The new documents represent Version 3.0.
Venture investing across the nation fell in the fourth quarter, but you would never know it by looking at private company valuations in Silicon Valley. They were strong, with up rounds exceeding down rounds by an expanding margin and average deal prices rising, particularly in later rounds. This news comes from the Fenwick & West’s quarterly deal study.
Fenwick & West’s quarterly study of private company valuation trends in Silicon Valley found up rounds exceeded down rounds by 61% to 17% in the third quarter. This wasn’t quite as ebullient as the second quarter, when 74% of deals had higher valuations.
Average valuations also jumped 85%, well above the 69% increase of the third quarter. Series B rounds were exceptionally strong, rising an average of 164% from valuations set in the prior round of financing, the Fenwick & West’s study found.
For the ninth straight quarter, venture capital firms did more up rounds than down rounds for Silicon Valley-based startups in Q3, according to a report by law firm Fenwick & West. During the quarter, up rounds exceeded down rounds 70% to 15% with 15% flat, the report states. In Q2, up rounds exceeded down rounds 61% [...]
More Startups Adopt Transfer Restrictions, Insider Trading Policies To Tame The Rise Of Secondary Trading
As many as 20% of venture funded startups receiving expansion or later stage funding now place restrictions on the secondary trading, according to lawyers and experts in the field. Expect this number to increase. The secondary market has become a valuable source of liquidity for founders, top management and venture investors feeling the pain of [...]
Earlier this week, Cooley offered a sanguine portrait of the venture landscape. More than 72% of second quarter financings were up rounds, the largest percent since the fourth quarter of 2009, the law firm said. This enthusiasm for deals was so strong that the average Series A valuation rose to $8 million, the highest in [...]