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.

Please see full update for more information.

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Published In: Business Organization Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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