Up rounds exceeded down rounds in Q2 2006 for the tenth quarter in a row (69% up vs. 25% down, with 6% flat), although by less than Q1 2006 (which was 74% up vs. 15% down, with 11% flat). Fenwick & West recorded a 34% average price increase for Silicon Valley companies receiving venture capital in Q2 2006 compared to such companies’ previous financing round. Although this was a significant increase, it was less of an increase than in the prior four quarters.
The amount invested by venture capitalists in the US in Q2 2006 was approximately $6.7 bln, an increase over $6.4 bln in Q2 2005 and $6.2 bln in Q1 2006. The combined total of $12.9 bln for the first half of 2006 puts the industry on pace for its largest investing year since 2001. Acquisitions of venture backed companies in the US in Q2 2006 was approximately $7.1 bln in 92 transactions. This was a decline from $8.5 bln/97 transactions and $8.4 bln/103 transactions in Q2 2005 and Q1 2006, respectively, although the combined total of $15.5 bln/195 transactions for the first half of 2006 puts the industry on pace for its best acquisitions year since 2000.