State of Venture Quiz 2: Answers and Commentary

8/19/09Follow @bbuderi

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:

Series A

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:

Series B

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:

Series C

Correct answer: $33 million

Commentary: Whoopdedoo! It’s a … Next Page »

Bob is Xconomy's founder and editor in chief. You can e-mail him at bbuderi@xconomy.com, call him at 617.500.5926. Follow @bbuderi

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