PitchBook 2Q2015 U Essay

Submitted By Yaser-Jazouane
Words: 5901
Pages: 24

PAGE 6: SEED STAGE ACTIVITY DECLINES PAGE 16: 1Q 2015 LEAGUE TABLES

2Q 2015

First financings at lowest level since 3Q 2009
PAG E 5 »

Cleantech spotlight
PAG E 1 1 »

IPOs drop considerably
PAG E 13»

CREDITS & CONTACT

CONTENTS
3
4-5
6
7
8
9
10
11
12
13
14-15
16

PitchBook Data, Inc.
JOHN GABBERT Founder, CEO
ADLEY BOWDEN Senior Director, Analysis

Content, Design, Editing & Data

Introduction

ALE X LYKKEN Editor

Overview

GARRET T BL ACK Senior Financial Writer

ANDY WHITE Lead Data Analyst
DANIEL COOK Senior Data Analyst
BRIAN LEE Data Analyst
J ENNIFER SAM Senior Graphic Designer

Angel/Seed

J ESS CHAIDEZ Graphic Designer

Contact PitchBook

Early Stage

www.pitchbook.com
RESE ARCH research@pitchbook.com Late Stage

EDITORIAL editorial@pitchbook.com SALES

Activity by Sector

sales@pitchbook.com

Activity by Location
Sector Spotlight: Cleantech
Exits Overview
Exits by Type
Fundraising Overview
League Tables

COPYRIGHT © 2015 by PitchBook Data,
Inc. All rights reserved. No part of this publication may be reproduced in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping, and information storage and retrieval systems—without the express written permission of PitchBook Data, Inc.
Contents are based on information from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.
Nothing herein should be construed as any past, current or future recommendation to buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security.
This material does not purport to contain all of the information that a prospective investor may wish to consider and is not to be relied upon as such or used in substitution for the exercise of independent judgment.

2
P I TC H B O O K 2Q 2015
U. S . V E N T U R E I N D U S T RY R E P O R T

Introduction
Are valuations starting to take a toll on U.S. venture? Looking at first quarter data, that’s one possible conclusion. The number of financings continues to fall, down another 10% from the prior quarter and a full 24% since 3Q 2014. The 1,262 rounds completed in 1Q were the fewest recorded in four years. At the same time, capital invested remained upright in the first quarter at $13.8 billion. That total is also down from 4Q levels (-21%) but, even so, it represents the fourth highest quarterly sum since the dot-com days. While counts are sloping downward, combined value continues going up.
Most of 1Q’s decline was centered in the earliest stages, especially in seed and angel financing. That’s been the case for a few quarters now—early stage activity is on a three-quarter losing streak, off 2Q 2014 levels by 26%. It’s probably not a coincidence that
2Q 2014 was a high tide for capital invested. In fact, a quick glance at the seed, early and late stage graphs on pages 6 through 8 all show the same thing—a onequarter peak for capital invested levels followed by big dips in subsequent round counts. It seems that
VCs are becoming much more selective in what they

finance; the capital continues to flow, but to far fewer recipients. It’s worth pointing out that this sudden drop in activity is coinciding with a surge of interest in startups from outside Silicon Valley. The number of players in the market has only grown in recent years, but that hasn’t translated into more rounds. The market has thinned.
Valuations at the late stage have been widely blamed for the bubble scare.
There’s some debate among VCs that the frothiest valuations aren’t reflecting true market prices, since many financing opportunities are essentially being auctioned off to the highest bidders, especially firms less sensitive to entry prices than traditional VCs. Those valuations have trickled down to the earlier stages, where eyepopping price tags are (supposed to be) harder to justify. For perspective, Twitter’s Series B in 2007 valued the company at $22.75 million, almost half the median for Series Bs in 2014 ($37 million).…