The following tidbits are from the Fenwick and West Q3 Silicon Valley VC Activity Report.
- 70% of rounds were up rounds, 15% were down rounds, and 15% were flat. This is a much healthier quarter than the six previous quarters.
- Confidence from VC professionals is declining for the second time in 11 quarters, most likely due to the continued weakness in the IPO markets and significant global economic turbulence.
- VC investment was $8.4B in 765 deals for Q3 2011, according to Dow Jones. Northern California received 38% of investment capital, and 2011 is on track to exceed the amount invested in 2010.
- Acquisition activity (including buyouts) was $13B and 122 deals, according to Dow Jones.
- IPO activity showed 10 US venture-backed companies going public in Q3 2011, according to Dow Jones. On a not-so-positive note, half of them listed on non-US exchanges.
- Venture capital fundraising continued to be pitiful with $2.2B reported by Dow Jones. 2011 is on track to to be the fourth straight year that VC fundraising is less than VC investment.
Typical Silicon Valley deal terms for Q3 2011 were:
- 31% had a liquidation preference with 100% reporting a 1x multiple
- 39% of deals were participating preferred deals
- 6% of deals had cumulative dividends
- 97% of deals had weighed average anti-dilution
- 21% of deals had preferential redemption rights
- 2% of deals required corporate reorganization
If they provide it, I’ll do another post with a summary of the VC Experts reports on terms of non-Silicon Valley deals.
