Silicon Valley Venture Capital Survey – Fourth Quarter 2022
By: Cynthia Clarfield Hess , Mark A. Leahy
Our survey analyzed the terms of 169 venture financings closed in the fourth quarter of 2022 by companies headquartered in Silicon Valley.
Summary
The Q4 2022 data is consistent with what we would have expected. The terms are getting less attractive for companies, with the increase in valuations for a round of financing compared to the prior round going down, and an increase in senior liquidation preferences.
Despite a more challenging fundraising environment, more than 77% of companies receiving venture financing across industries in Q4 did so in an up round. However, they did so at far less of a price change increase (the change between the price per share at which companies raised funds in a quarter and the price per share at which companies raised funds in their prior round of financing), with a median price change across industries dropping from 98% in Q3 to 57% in Q4.
The Fenwick Venture Capital Barometer™, measuring the average percentage share price change between rounds, dropped from 122% in Q3 2022 to 87% in Q4 2022. This is returning closer to our long-term average of 74%, after climbing to over 253% in Q1 2022.