Background -

We analyzed the terms of 150 venture financings closed in the fourth quarter of 2014 by companies headquartered in Silicon Valley.

Overview of Fenwick & West Results -

Valuation results continued very strong in 4Q14.

- Up rounds exceeded down rounds 79% to 6%, with 15% flat. This was an increase from 3Q14 when up rounds exceeded down rounds 76% to 12%, with 12% flat.

- The Fenwick & West Venture Capital Barometer™ showed an average price increase in 4Q14 of 115%, an increase over the 79% recorded in 3Q14, and the highest amount recorded since we began calculating this statistic in 2005.

- The median price increase of financings in 4Q14 was 61%, an increase from the 43% registered in 3Q14.

- The software industry again led all industries with 50% of the deals and the highest median price increase, while internet/digital media had the second largest percentage of deals and the highest average price increase and highest percentage of up rounds. The hardware industry also had very good returns and the life science industry had solid returns.

- We note that the valuation strength was seen across series, and that investor favorable terms such as senior liquidation preference were used relatively infrequently.