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Background
In our survey, we analyzed 171 venture fundings that were closed by Silicon Valley-based companies in the fourth quarter 2023.
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The average number of venture capital investments in the Bay Area for the fourth quarter was 174. Aside from a few data points, Q4 also showed a marked consistency with the previous quarter.
Since Q4 of 2022, the Fenwick Venture Capital Barometer”, which measures the average share price changes between rounds (87%) has been consistent.
The Key Findings
The Series B financings are the fastest growing, while other series remain largely flat
The Series B financings (55) accounted for 32% of the total Q4 financings, a slight increase from Q3. The Series A Financings (80 total) accounted for 47% of the Q4 Financements, a slight decrease from Q3’s 53%. The later stage financings (36) accounted for 21% of the total Q4 financings. This is almost unchanged from Q3.
The Down Rounds are Growing Slightly
This percentage is slightly higher than the previous quarter, which was 1%. It increased to 13% by Q4 2023. It is the largest percentage of down round financings seen since Q1 of 2020 when it jumped from 1% to 14% at the time of the COVID-19 Pandemic. The Series E+ fundings are still the hardest hit. The largest percentage of Q4 down rounds was 26% for life science companies.
Prices Flat
In Q4 the median change in price was 44%, which is unchanged from Q3. Median price changes continue to be higher for software and digital media/internet companies than other companies.
Pay-to Play Provisions Flat
In Q4, the share of financings containing pay-to play provisions allowing nonparticipating shareholders’ preferred stocks to be converted into common or shadow preferred shares was equal to the four-quarter average.
Fundraising Environment Remains Difficult
The fundraising environment is still challenging, as shown by the increase in the number of down rounds (6% in Q4) and an overall favorable financing climate.
Fenwick data on valuations
Prices Change
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