Do you get the feeling deal flow is picking up a bit? Well, you might be right. But does that make things better for entrepreneurs? Not necessarily. As Boston lawyer John Hession sums up: “The market is improving. That doesn’t necessarily mean that deal terms are improving or valuations are improving. It means the number of financings, maybe, are improving.”
Yesterday, I put out a six-question quiz about venture capital deal terms. The questions were culled from a survey of second-quarter deals by Hession’s firm, Cooley Godward Kronish. Michael Greeley, chairman of the NEVCA and a general partner with Flybridge Capital Partners. Thanks to John and Michael. Let’s see how you did.
1) What was the median pre-money valuation of a Series A round in Q2?
Reader responses:
Correct answer: $4.4 million
Commentary: Cooley’s survey from Q1 had median Series A pre-money valuations at a scant $3.4 million—so this marks a hefty rise. But it’s still well below the median from last year, which ran at about $6.5 million.
2) What was the median pre-money valuation of a Series B round in Q2?
Reader responses:
Correct answer: $17 million
Commentary: Another uptrend. The figure was $13.2 million last quarter, but still a fair bit from the $24 million in the first half of 2008.
3) What was the median pre-money valuation of a Series C round in Q2?
Reader responses:
Correct answer: $33 million
Commentary: Whoopdedoo! It’s a
Author: Robert Buderi
Bob is Xconomy's founder and chairman. He is one of the country's foremost journalists covering business and technology. As a noted author and magazine editor, he is a sought-after commentator on innovation and global competitiveness. Before taking his most recent position as a research fellow in MIT's Center for International Studies, Bob served as Editor in Chief of MIT's Technology Review, then a 10-times-a-year publication with a circulation of 315,000. Bob led the magazine to numerous editorial and design awards and oversaw its expansion into three foreign editions, electronic newsletters, and highly successful conferences. As BusinessWeek's technology editor, he shared in the 1992 National Magazine Award for The Quality Imperative.
Bob is the author of four books about technology and innovation. Naval Innovation for the 21st Century (2013) is a post-Cold War account of the Office of Naval Research. Guanxi (2006) focuses on Microsoft's Beijing research lab as a metaphor for global competitiveness. Engines of Tomorrow (2000) describes the evolution of corporate research. The Invention That Changed the World (1996) covered a secret lab at MIT during WWII. Bob served on the Council on Competitiveness-sponsored National Innovation Initiative and is an advisor to the Draper Prize Nominating Committee. He has been a regular guest of CNBC's Strategy Session and has spoken about innovation at many venues, including the Business Council, Amazon, eBay, Google, IBM, and Microsoft.
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