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Venture valuations soften modestly in Q1

Venture capitalists remained a sanguine lot in the first quarter, but valuations for Silicon Valley companies nonetheless softened modestly in Series B and later rounds.

Up rounds topped down rounds by a wide margin, essentially matching the results of the fourth quarter and continuing an upbeat multi-quarter trend. Eighty-one percent of deals were marked higher and 11 percent were marked lower, according to data from Fenwick & West.

The results, based on 185 deals in Silicon Valley the law firm monitored, suggest investors continue to see progress at their companies and opportunities for growth in the quarters ahead.

Source: Fenwick & West.

However, price increases in many deals were less robust than in the fourth quarter. Per-share deal prices rose an average of 75 percent in the first quarter, compared with 85 percent in the fourth quarter. The median increase in share prices rose slightly to 56 percent from 52 percent, the study shows.

The study found the average price increase fell in B, C, D, E and later rounds. The decline was most evident in software deals, but also showed up in hardware and life sciences transactions.

Valuations in internet and digital media deals were strong.