Last year wasn’t the finest for the venture-capital industry, which experienced a continued lack of big returns from initial public offerings and mergers and acquisitions and had to deal with fundraising hurdles besides. But according to a new survey from law firm Fenwick & West, there was some good news for venture capital towards the end of last year.
Valuations of venture-capital investments in startup companies improved markedly in the second half of 2009, showing that the trajectory for deals was positive, according to the new survey. The survey, which analyzed the terms of venture financings for 335 companies headquartered in Silicon Valley that raised money in 2009, found that “up” rounds–in which the price per share at which a company sells its stock rose from a previous financing–exceeded “down” rounds 44% to 33%, with 23% flat, in the second half of 2009. In contrast, down rounds exceeded up rounds 47% to 28%, with 25% flat, in the first half of 2009, notes Fenwick & West.
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Author: Pui-Wing Tam
