Fenwick & West, a US-based law firm, said its survey of venture capital (VC)-backed technology and life science deals found an increase in prices.
Fenwick’s Third Quarter 2010 Silicon Valley Venture Capital Survey of 107 deals between July and end-September found more than half showed an increase in price per share compared to previous financing rounds.
Barry Kramer, a partner in the firm and co-author of the survey, said: "During the third quarter of 2010, up rounds exceeded down rounds 52% to 30% with 18% flat. This was similar to the second quarter of 2010, when up rounds exceeded down rounds 55% to 27%, with 18% flat, and the fifth consecutive quarter in which up rounds exceeded down rounds."
The average price increase for the quarter was 28%, compared to 30% in the first quarter of 2010.
Michael Patrick, survey co-author and also a partner at the firm, said the best performing industries in the quarter from a valuation perspective were internet and digital media, followed by life sciences.
Bruce Dines, head of Liberty Global Ventures, the corporate venturing unit of US-based cable company Liberty Global International, said: "The overall contraction of the VC market is at the lower end with firms who often do earlier stage investments. We have not seen much of a ripple effect from that at the [series] C investment phase, which is where most of our focus is. We did see some valuation adjustments in 2009, but they have bounced back reasonably well in 2010."