Kara Swisher

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Fenwick VC Survey: Q2 Funding Valuations Shoot the Moon

According to Fenwick & West’s latest Silicon Valley Venture Capital Survey, fundings in the second quarter of this year showed the highest valuation increases in more than five years.

Looking at 115 financings of tech and life sciences companies, in Q2 the well-known tech-focused law firm saw “up” rounds accounting for 74 percent, while “down” ones were 11 percent. Flat rounds were 15 percent.

That was a marked change from the previous quarter, which was 65 percent up, 22 percent down and 13 percent flat.

More importantly, it was the 12th consecutive quarter in which ups were ahead of downs.

Perhaps even more importantly, average funding prices for the quarter rose 99 percent, which is nearly double the 52 percent increase in Q1. Two big-ticket financings upped the Q2 number, which would have been 70 percent if they were removed.

Still, it is the highest amount increase since Fenwick began compiling the numbers in 2004.

Internet/digital media and software was the biggest beneficiary of the rise. Hardware was next, but life sciences and cleantech did not keep pace.

Fenwick said that VC fundraising is still lower than 2007 levels, noting that “venture capital continues to be a tale of two cities, where the Internet/digital media and software industries dominate other industries, and venture capitalists with proven track records can raise large funds but fundraising for others is much more problematic.”

The report, co-authored by Fenwick partners Barry J. Kramer and Michael J. Patrick, noted that Series B rounds were strong in the quarter, although the percentage of them has declined for three straight quarters, “perhaps indicating that companies are having difficulty securing Series B funding, but those that do are being rewarded with substantial valuation increases.”

Here’s the report for your personal perusal:

Q212_VC_Terms_Survey_Report _Spacing_

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