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Venture valuations slip in Q4

Private company valuations slipped in the fourth quarter with the most noticeable change taking place in later rounds.

In a study from law firm Cooley, median pre-money valuations fell for all investment stages except A rounds during the period, suggesting a cooling of interest for high-priced deals. Still, Series A, B and C round valuations remained at relatively high levels.

The most dramatic drop took place for Series D and later rounds, where the median pre-money valuation fell 71 percent from an unusually strong third quarter to $200 million, the Cooley study found. This brought it close to the trend line of the past nine quarters and extended the somewhat steady decline in valuations from the end of last year.

The Series C median pre-money valuation fell almost 11 percent to $123 million, yet maintained a year-long trend of improving valuations over 2016. The median pre-money valuation for Series B also extended last year’s trend of higher valuations over 2016, even as it pulled back 9 percent in the fourth quarter.

The Series A median pre-money was unchanged quarter-to-quarter in the fourth quarter and also was up from last year.

Action Item: To access the Cooley study, go here.

Photo courtesy of alexsl/iStock/Getty Images.