Buzz Archive:
Trends in Terms of Venture Financings In the San Francisco Bay Area (Fourth Quarter 2007)

by Barry J. Kramer and Michael J. Patrick of Fenwick & West LLP, 3/11/2008

Data and trends. The amount invested by venture capitalists in the U.S. in 4Q07 was approximately $7.3 billion. Although this amount was approximately 5% less than the amounts invested in 3Q07 and 2Q07, and flat with 1Q07, 2007 was the best year for venture investment since 2001. The total amount invested by venture capitalists in the U.S. in 2007 ($29.9 billion) was up approximately 8% over 2006. Further, acquisitions of venture backed companies in the U.S. increased in 4Q07 with 106 transactions totaling $16.2 billion, compared to 97 transactions totaling $11.3 billion in 3Q07. 2007 was the best acquisition year for venture backed companies since 2000, both in terms of aggregate amount paid ($46.2 billion) as well as median amount paid per transaction ($98 million).

What does all this mean? With up rounds exceeding down rounds for the 16th quarter in a row (69% up vs. 22% down, with 9% flat) - is now the time to be bullish or bearish? Kudos to Barry J. Kramer and Michael J. Patrick of Fenwick & West LLP for providing the data and analysis.