Silicon Valley law firm Fenwick and West just issued their "Q1 2009 Terms of Venture Financings Report". Published by Fenwick's Barry Kramer and Michael Patrick, the firm is involved in a large number of early stage deals. This quarterly report summarizes the statistics on the term sheets that crossed the firm's desks (a statistically significant sample size) and then pull in other venture capital industry statistics to give an interesting sense of deal flow and investing trends. The Q1 report stood out to me. Some highlights:
- A much lower amount of venture capital was invested in Q1 compared to past years (confirming what we all feabelieved since last fall)
- Down rounds exceeded up rounds, 46% to 25%, with 29% flat.
- Q1 had the lowest quarterly amount of capital invested since 1998; lowest # of deals since 1996.
- First negative price change in Fenwick's price change barometer since its inception.
On the positive side, the Silicon Valley Venture Capitalists Confidence Index™, produced by Professor Mark Cannice at the University of San Francisco, showed its first increase in 6 quarters, going from 2.77 to 3.03 on a 5-point scale.
Bottom line: VC industry continues to pull back, venture capital continues to be more difficult to come by and valuations are down, but maybe we've turned the corner.
I added myself to Fenwick's distribution list while running Technology Venture Corporation's entrepreneurial education series a few years ago, which was hosted at Fenwick's offices. If you want to add yourself to the distribution list, follow the instructions on the last page of the report.
Download a PDF of the report here.
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