{"id":22998,"date":"2020-06-16T10:57:07","date_gmt":"2020-06-16T05:27:07","guid":{"rendered":"https:\/\/www.the-next-tech.com\/?p=22998"},"modified":"2020-06-16T10:58:05","modified_gmt":"2020-06-16T05:28:05","slug":"a-new-silicon-valley-venture-report-shocks-because-of-how-little-the-pandemic-has-impacted-dealmaking","status":"publish","type":"post","link":"https:\/\/www.the-next-tech.com\/business\/a-new-silicon-valley-venture-report-shocks-because-of-how-little-the-pandemic-has-impacted-dealmaking\/","title":{"rendered":"A new Silicon Valley venture report shocks \u2014 because of how little the pandemic has impacted dealmaking"},"content":{"rendered":"<p>The law company Fenwick &amp; West has released some fresh information to emphasize how Covid-19 has affected the area of venture capital in Silicon Valley.<\/p>\n<p>The biggest surprise? It is how little influence the international pandemic appears to have had on dealmaking this spring.<\/p>\n<p>Consider first that valuations in April were actually higher than in March, and that despite massive layoffs in the tech sector, so-called up-rounds only declined modestly, from 72% in March to 70% in April.<br \/>\n<!-- Home page 728x90 --><br \/>\n<ins class=\"adsbygoogle\"\nstyle=\"display:inline-block;width:728px;height:90px\"\ndata-ad-client=\"ca-pub-9864771813712812\"\ndata-ad-slot=\"3152971286\"><\/ins><br \/>\n<script>\n(adsbygoogle = window.adsbygoogle || []).push({});\n<\/script><\/p>\n<p>In reality, though you would think the substantial disruptions motivated by virus could quicken things tremendously, it seems more like the continuous continuation of a trend that started this past year, when 83 percent of financings saw businesses receive higher valuations.<\/p>\n<p>Our guess is that this change actually happened around the time of WeWork&#8217;s pulled IPO last fall, which apparently reminded investors that what goes up &#8212; up and up &#8212; occasionally comes down quickly, also.<\/p>\n<p>However, it does beg the question: what about down rounds? Certainly, there were lots of those this spring (you might imagine), such as startups from the travel business or that count on the travel sector for a customer.<\/p>\n<p>But Fenwick&#8217;s information, at least, tells another story. The amount of prices which were discounted by investors accounted for only 12% of deal quantity in April; that is significantly lower than in March, when 16% of businesses experienced rounds down.<\/p>\n<span class=\"seethis_lik\"><span>Also read:<\/span> <a href=\"https:\/\/www.the-next-tech.com\/top-10\/best-ai-hugging-video-generator\/\">10 Top-Rated AI Hugging Video Generator (Turn Images Into Kissing Instantly!)<\/a><\/span>\n<p>It will make sense, since the information is unique to April independently, particularly when accounting for its many startups which were pitched a more lifeline by their own investors in the kind of extensions to previous rounds which were closed before this year or late last year.<\/p>\n<p>Investors do not like seeing their bargains discounted by new investors.<\/p>\n<p>The believing, also, is simply to find the firms through this tough patch, then determine what is what. (Relatedly, there has been a substantial growth in horizontal rounds: 18 percent in April, as opposed to 13 percent in March and 9 percent this past year.)<\/p>\n<p>More surprising was that the sheer pace of investing in startups in Silicon Valley. Although there was discussion about shareholders needing to quit and evaluate the health of their <a href=\"https:\/\/www.the-next-tech.com\/business\/the-importance-of-information-technology-in-business-today\/\">portfolio businesses out of mid-March to early April<\/a>, it appears now that VCs never actually stepped off the gasoline.<\/p>\n<p>According to Fenwick, the amount of prices really increased from 54 from March to 64 in April; which almost matches the 65 prices per month which were finished this past year, once the world was not grappling with an outbreak.<\/p>\n<p>For what it\u2019s worth, many of these were later-stage deals. Fenwick\u2019s data shows the percentage of Series D and E+ deals increased to 38% of all financings in April, up from 21% in March and the highest that figure has been since August 2018, when Series D\/E+ deals combined for 42% of all financings.<\/p>\n<p>Simply speaking, VCs were plowing more money into what they view as certain things &#8212; and in to management groups that they were not fulfilling for the very first time .<br \/>\n<span class=\"seethis_lik\"><span>Also read:<\/span> <a href=\"https:\/\/www.the-next-tech.com\/entertainment\/fallout-5-coming-or-not-release-date\/\">New Bethesda\u2019s Fallout 5: Is It Coming Or Not? Answered<\/a><\/span>\n<p>However the disconnect between what is going on in the world along with the rate of enterprise investment is somewhat jarring.<\/p>\n<p>Asked about the amounts, among the report&#8217;s writers &#8212; longtime attorney Barry Kramer &#8212; mentioned above email that averages&#8221;can vague&#8221; that the disparities in how firms are being affected at the moment, with a few benefiting from the stay-work-learn-at-home change, while others, such as biotech research, hardware and manufacturing being hurt by it.<\/p>\n<p>However he noticed that regardless of the current headlines, for today,&#8221;we are not seeing huge upheaval or dread in the business.&#8221;<\/p>\n<p>VCs are rather&#8221;adjusting to the present scenario.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The law company Fenwick &amp; West has released some fresh information to emphasize how Covid-19 has affected the area of<\/p>\n","protected":false},"author":147,"featured_media":23001,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"_links":{"self":[{"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/posts\/22998"}],"collection":[{"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/users\/147"}],"replies":[{"embeddable":true,"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/comments?post=22998"}],"version-history":[{"count":2,"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/posts\/22998\/revisions"}],"predecessor-version":[{"id":23003,"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/posts\/22998\/revisions\/23003"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/media\/23001"}],"wp:attachment":[{"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/media?parent=22998"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/categories?post=22998"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.the-next-tech.com\/rest\/wp\/v2\/tags?post=22998"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}