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Fenwick & West's Silicon Valley Venture Capital Survey Reveals Continued Strong Valuations In Fourth Quarter Of 2012 - Software Industry Leads

MOUNTAIN VIEW, Calif., Feb. 19, 2013 /PRNewswire/ -- Fenwick & West LLP, one of the nation's premier law firms providing comprehensive legal services to high technology and life science clients, today announced the results of its Fourth Quarter 2012 Silicon Valley Venture Capital Survey.

The survey analyzed the valuations and terms of venture financings for 116 technology and life science companies headquartered in the Silicon Valley that raised capital in the fourth quarter of 2012.

"During the fourth quarter of 2012, up rounds exceeded down rounds 71% to 8%, with 21% flat. This was an increase over the third quarter of 2012, when up rounds exceeded down rounds 61% to 17%, with 22% flat. This was the fourteenth consecutive quarter in which up rounds exceeded down rounds," said Barry Kramer, partner in the Corporate Group of Fenwick & West and co-author of the survey.

An up round is one in which the price per share at which a company sells its stock has increased since its prior financing round. Conversely, a down round is one in which the price per share has declined since a company's prior financing round.

The Fenwick & West Venture Capital Barometer™ – which measures the change in share price of Silicon Valley companies funded during the quarter compared with the share price of their previous financing round – showed an 85% average price increase for the quarter, a slight increase from the 78% reported in the third quarter of 2012. The median price increase of these financings was 41%, also an increase from the 23% recorded in the third quarter.

"The Barometer results were very strong this quarter," said Kramer. "The increase in the Barometer was not due to a few financings with significant valuation increases, but reflected strength across the board." 

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