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May 28, 2007

VC Markup Sale Underway: Everything Web 2.0 Up 75%!

The Fenwick & West Venture Capital Barometer for the first quarter of 2007 is out, and the average funded Valley company's valuation ticked up an impressive 75%. Whoa, that is impressive -- at least until you consider that it was skewed by a small number of deals, that these were largely insider rounds, and that there have been no public exits to speak up to drive market-relevant pricing.

"This is the largest increase we have seen since Fenwick & West started the survey in early 2002," said Barry Kramer, partner in the firm and co-author of the survey. "The increase was driven in significant part by eleven first quarter financings in which the purchase price of the stock sold in the financing was at least three times higher than the prior round. Of these eleven financings, most were in Web 2.0 and related fields."

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