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Cooling in venture valuations seen

Surprising signs of a cooling in venture-capital valuations appeared in the third quarter compared with the previous three-month period, according to a deal survey from Wilson Sonsini Goodrich & Rosati.

The survey found that median pre-money valuations retreated for all deal stages during the period, with a particularly steep decline for Series C and later rounds.

The observation runs counter to a deal analysis released earlier by Cooley, in which higher median pre-money valuations were noticed at all deal stages except seed. It also contrasts with the tone of a study from Fenwick & West, which discovered higher share prices for venture-backed Silicon Valley companies in B, C and D rounds during the third quarter.

The Wilson Sonsini study found the median pre-money valuation for Series C and later rounds fell sharply to $87.7 million from $149 million in the second quarter. The Series B median pre-money valuation pulled back to $45 million from $51.4 million.

At the same time, the median pre-money for Series A rounds slipped to $11 million from $15.9 million in Q2, the survey said. The $15.9 million number was near a record high.

The median round size in Q3 fell as well for Series A and B deals, but rose for Series C and later.

The median amount raised through bridge loans for post Series A deals tumbled almost in half to $700,000.

The study looked at deals the law firm handled during the quarter.

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