• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

StrictlyVC, LLC

Six months ahead.

  • Home
  • Newsletter
  • Advertising
  • Events
  • Podcasts
  • About
    • About Connie
    • Mission
    • Code of Ethics
  • Contact

Valuations Wilt

A year ago, startup valuations hit a 12-year peak as the numbers of companies joining the billion-dollar-plus club soared.

Screen Shot 2016-08-19 at 8.23.50 PMToday, those numbers are looking far more run of the mill. So suggests a new survey published by law firm Fenwick & West, which analyzed the venture financings of 195 Silicon Valley-based companies over the second quarter to draw its conclusions.

Among the survey’s findings: up rounds — in which a startup’s price per share increases over its previous funding round — are down slightly. Specifically, in the second quarter, they exceeded down rounds 74 percent to 13 percent, compared with the first quarter of 2016, when up rounds exceeded down rounds 78 percent to 11 percent. (The other funding rounds were flat.)

Valuations also dropped, and pretty dramatically. The average percentage change in the share price of companies funded during the quarter showed a 40 percent price increase for the quarter, but that’s down from the 53 percent jump in price that startups saw in the first quarter and the lowest amount since the third quarter of 2010.  Meanwhile, the median price increase of financings in the first quarter was 31 percent, down from 36 percent in the first quarter.

“It’s not like things are so horrible now,” says attorney Barry Kramer, who co-authored the survey. “But this is the third straight quarter of weakening valuations. They’ve fallen a great deal from where they were a year ago. And the question is: where do we go from here?”

Kramer warns against drawing comparisons to the downturns of 2002 and 2008.

(More here.)

Share:

  • Click to share on Facebook (Opens in new window)
  • Click to share on Twitter (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to email a link to a friend (Opens in new window)
  • Click to print (Opens in new window)

Related

Filed Under: Morning Summary Tagged With: valuations

Don’t Miss Out! 

Sign up today to receive a free daily email with everything you need to start your day. Plus, keep track of the companies and personalities that will shape the industry in the months and years to come. Let StrictlyVC be your very own venture capital concierge.

Sign Up →

 

Primary Sidebar

Sign Up!

Add your email below to receive a copy of our free daily StrictlyVC newsletter. (Please don't forget to confirm your email address by clicking on the link in the confirmation link we will send you!)

You can unsubscribe anytime. For more details, please review our Privacy Policy.

Thank you!

We have sent you an email. Please click on the link to confirm your subscription!

.

@StrictlyVC on Twitter

Tweets by StrictlyVC
  • Privacy Policy
  • Terms of Service
  • Advertising

StrictlyVC, LLC

© 2023 StrictlyVC, LLC. All rights reserved.

 

Loading Comments...