A new Silicon Valley venture report shocks — because of how little the pandemic has impacted dealmaking

The law firm Fenwick & West has published some new data to highlight how Covid-19 has impacted the world of venture capital in Silicon Valley. The biggest surprise? It’s how little impact the global pandemic seems to have had on dealmaking this spring. Consider first that valuations in April were actually higher than in March,…

A new Silicon Valley venture report shocks — because of how little the pandemic has impacted dealmaking

The law firm Fenwick & West has published some new data to highlight how Covid-19 has impacted the world of venture capital in Silicon Valley. The biggest surprise? It’s how little impact the global pandemic seems to have had on dealmaking this spring.
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.
In fact, though you’d think the massive disruptions prompted by virus would accelerate things wildly, it looks more like the steady continuation of a trend that began last year, when 83% of financings saw companies receive higher valuations.
Our guess is this shift really happened around the time of WeWork’s pulled IPO last fall, which seemingly reminded investors that what goes up — and up — sometimes comes down fast, too. But it does beg the question: what about down rounds? Surely, there were a lot of these this spring (you might imagine), including startups in the travel industry or that count the travel industry as a customer.
Yet again, Fenwick’s data, at least, tells a different story. The number of deals that were marked down by investors accounted fo
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