FENWICK & WEST LLP: Trends in Terms of Venture Financings In Silicon Valley (Second Quarter 2009)

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Background – We analyzed the terms of venture financings for 89 companies headquartered in the Silicon Valley that reported raising money in the second quarter of 2009.

Overview

*Down rounds exceeded up rounds 46% to 32%, with 22% flat. This was slightly better than 1Q09 when down rounds outpaced up rounds 46% to 25%, with 29% flat. The past two quarters are the only quarters since 4Q03 in which down rounds have exceeded up rounds.

*The Fenwick & West Venture Capital Barometer™ showed an average price decrease of 6% for companies receiving venture capital in 2Q09 compared to such companies’ prior financing round. This was a slight decline from 1Q09, when the Barometer registered a decrease of 3%. The past two quarters are the only quarters in which the Barometer has been negative since we began reporting the Barometer in 1Q04.

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