US VC

Valuations
Report
2019 Annual
 Contents Credits & contact

PitchBook Data, Inc.

Introduction 2
John Gabbert Founder, CEO
Angel & seed 3-4 Adley Bowden Vice President,
Market Development & Analysis
Early-stage VC 5-6
Content
Late-stage VC 7-8
Cameron Stanfill, CFA Analyst II, VC
Nontraditional investors 9-10 Kyle Stanford Analyst, VC
Van Le Senior Data Analyst
Valuations by sector 11
Contact PitchBook
Liquidity 12-13
Research
[email protected]
Deal terms 14
Designed by Conor Hamill

Click here for PitchBook’s report

Introduction methodologies.

US VC deal sizes have declined YoY at the late stage. Both

median and average deal sizes shrank relative to 2018’s
Cameron Stanfill, CFA
figures—a distinct shift from the steadily climbing deal sizes
Analyst II, VC
and valuations over the last decade. However, we still expect
VC deal activity to remain healthy in 2020, including a
significant portion of mega-deals ($100 million+).

The sizes and valuations of US VC deals with nontraditional

investment are significantly larger than those without
Kyle Stanford
nontraditional investor participation. The characteristics Analyst, VC
that diversify nontraditional investors from traditional VCs
make them less price sensitive, either because a single
VC deal provides minimal exposure to the larger funds or
because non-cash elements can increase the overall return
for investors, as is the case with many CVCs.

The median valuation step-up at the time of an IPO trends

toward the 1.0x breakeven mark. A handful of massive
valuations for money-losing startups have been called into
question by increasingly skeptical public market investors,
leading to disappointing aftermarket performance of some
recent VC-backed IPOs. Any further struggles in the IPO
market could drop the median below 1.0x, indicating more
than half of IPOs are completed at a lower price than their
last private market valuation. This would be detrimental to
the VC market, especially at the late stage, as investors may
pull back support if faced with significant losses.

2 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Angel & seed
Percentile distribution of angel & seed deal sizes ($M)
$3.5

$3.0

$2.5

$2.0

$1.5

$1.0

$0.5

$0.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Average 75th percen�le Median 25th percen�le

Source: PitchBook | Geography: US

While US angel deal sizes haven’t changed much over the Percentile distribution of angel & seed pre-
past decade, seed deal sizes and pre-money valuations money valuations ($M)
have continued to increase steadily over the last couple
years, highlighting investors’ sustained appetite for the risks $14
associated with this stage. The underlying factors for the
growth of both sizes and valuations seem to imply seed- $12
stage companies are entering the VC pipeline with more
developed business models than in the past, commanding $10
higher multiples on the ability to provide investors a better
view into their operation. As traditional seed investors $8
are able to source more mature companies, a developing
stage of pre-seed investments has filled the gap. These
$6
investments, which are not included in this dataset, have
also contributed to the growth of seed deal sizes, which may
no longer always be the first institutional investment in a $4
company. The median age of companies receiving angel or
seed financing has steadily grown by more than a year over $2
the past decade, reaching 2.9 years in 2019.
$0
The initial costs of starting a company, especially a software
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
company, have continually declined over the past decade as
the unbundling of tech services into the cloud have allowed
companies to pay for only the necessary components. Average 75th percen�le
Coupled with ever-expanding financing options for young Median 25th percen�le
companies, these low starting costs help startups operate
Source: PitchBook | Geography: US
longer before raising institutional capital. Once higher
capital infusions are needed for growth, investors have
access to targets with a product and a developed business
model; before, the need for VC came with a proof-of-

3 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Angel & seed

concept and a pitch deck. This trend has pushed angel & Percentile distribution of proportion
seed valuations to the highest on record, with the median acquired at angel & seed stage
pre-money valuation reaching $8.0 million and representing 35%
14.3% growth in the past year alone. Since 2009, median
angel & seed deal valuations have grown 128.2%, a CAGR of
30%
just under 10%.

25%
In many cases, it’s natural for valuations to rise alongside
deal sizes. This proved especially true in the top quartile of
the angel & seed stage, in which deal sizes grew by 15.6% 20%
to $3.0 million in 2019, pushing top-quartile valuations up
by an even higher percentage (20%) to $12.0 million. As the 15%
seed stage moves later into the VC lifecycle, competition
between investors has added a boost to deal sizes and 10%
valuations alike. The current founder-friendly environment
starts at this stage, where founders can gain leverage by
5%
receiving multiple term sheets from investors.

0%
Despite growth and competition at the angel & seed
stage, we have observed the stakes taken by investors 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
growing over the past few years, a stark juxtaposition to
the declining percentage acquired at other VC stages. In Average 75th percen�le
theory, this growth in stake percentage—which has hovered
Median 25th percen�le
at roughly 25% for the past two years after dipping to 20%
from 2011 through 2015—is a natural shift for startups raising Source: PitchBook | Geography: US

angel & seed rounds as a compensation for investors taking

higher risk with larger deals at this stage. The top-quartile
stake acquired notched just over 31% in 2019, though
Median time (years) from founding by stage
the bottom-quartile stake acquired has shifted the most 9
dramatically, increasing to 17.5% in 2019 from a decade low 8.0 7.9
of 12.4% in 2011. 8

4 3.3 3.4

3
2.9
2 2.7

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Angel & seed Early VC Late VC

Source: PitchBook | Geography: US

4 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Early-stage VC
Percentile distribution of early-stage VC deal sizes ($M)
$16

$14

$12

$10

$8

$6

$4

$2

$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Average 75th percen�le Median 25th percen�le

Source: PitchBook | Geography: US

Early-stage VC is in the midst of a dynamic shift within Percentile distribution of early-stage VC pre-
the venture ecosystem. In 2019, over 50 deals of $100 money valuations ($M)
million+ were completed at the early stage, a testament
to the surfeit of capital available to companies at this $80
stage. Nontraditional investors, especially corporate VCs,
$70
have extended their VC investments into the early stage,
building upon years of increased presence within the
$60
broader VC industry. These investors have generally been
less price sensitive than traditional VCs for myriad reasons, $50
translating into higher valuations for companies receiving
nontraditional dollars. We don’t believe this has had an $40
overall negative effect on the industry—such investors
bring different perspectives and benefit packages to $30
companies moving through the venture ranks. Going
forward, the presence of nontraditional capital portends $20
sustained competition for deals, spurring the growth in
deal value at the early stage. $10

The top-quartile early-stage VC deal size grew 7.0% YoY $0

to $15.0 million, pushing above the early-stage average 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
deal size again after the average eclipsed the top quartile
in 2018 for the first time this decade. As deal sizes grow,
Average 75th percen�le
early-stage companies are posting the strongest valuation
step-ups of any stage. The median early-stage step-up Median 25th percen�le
reached 2.0x in 2019, while the average step-up stayed Source: PitchBook | Geography: US
at 2.5x. The steady step-up figures over the past several
years provide validation for the capital sums and valuations
of investments made earlier in the startup lifecycle;
despite the growth in deal size and valuation, realized and
expected growth metrics continue to meet or surpass

5 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Early-stage VC

investor expectations. In fact, early-stage companies Percentile distribution of proportion

raising rounds in 2019 saw their relative velocity of value acquired at early VC stage
creation (RVVC) rise to 59.7%, meaning that early-stage
45%
companies realized valuation growth of nearly 60%
each year since their previous investment. This method 40%
has inherent survivorship biases because it only tracks
companies receiving funding; however, this figure is by far 35%
the highest growth rate of any stage in the industry, and
30%
the highest we have seen for early-stage companies.
25%
Early-stage VC continues to move into even more founder-
friendly territory, a byproduct of heightened interest in 20%
the asset class. The median stake acquired in early-stage
15%
companies has drifted down from 26.2% in 2017 to 25.0%
in 2019. Series B financings have fallen to 20.0% acquired 10%
at the median, the lowest figure of the decade. Founders
have many options when striving to keep dilution low at 5%
this stage. As deal sizes continue to increase, the use of
0%
debt to lever deals and lower the overall cost of capital
provides a path toward massive growth while keeping 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
control centered on the executive team, especially for
capital-intensive business models. Knock, Flyhomes and Average 75th percen�le
Mission Lane, all of which operate in real estate or lending
markets, have raised substantial amounts of debt alongside Median 25th percen�le
equity investments. Increased competition within deals
Source: PitchBook | Geography: US
should also continue to put downward pressure on the
percentage acquired figure, at least continuing current
trends moving forward.

Median and average early-stage VC step-up Median early-stage RVVC between rounds
multiples 70%
3.5x
59.7%
60% 56.0%

3.0x
50%

2.5x 40%

30%
2.0x
20%

1.5x 10%

0%
1.0x
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Median Average % growth in valuation between rounds

Source: PitchBook | Geography: US
RVVC =
years between rounds

Source: PitchBook | Geography: US

6 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Late-stage VC
Percentile distribution of late-stage VC deal sizes ($M)
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Average 75th percen�le Median 25th percen�le

Source: PitchBook | Geography: US

Capital continued to pour into the late stage throughout Percentile distribution of proportion acquired
2019; however, the end of the year saw some cooling in at late VC stage
deal sizes. In a market characterized by the rise of mega-
deals, our data illustrates a YoY decline in late-stage deal 35%
sizes across all quartiles, with the largest drop at the
average. This is a fairly distinct shift when compared to the 30%
continued increase in valuations and the trend of steadily
climbing deal sizes over the last decade. Despite this, we 25%
still expect healthy VC dealmaking in 2020, including a
significant proportion of mega-deals. 20%

Smaller deal sizes also fetched slightly lower ownership

15%
percentages than in 2018, continuing a larger downward
trend over the past few years. The sustained abundance
10%
of capital available to startups at the late stage has
diminished the pure bargaining power of cash, giving
entrepreneurs leeway to negotiate more favorable terms, 5%
including raising capital in the private markets to postpone
an IPO. This competition for deals driving higher deal 0%
sizes for lesser ownership has logically also engendered 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
a long-term valuation growth trend at this stage. In 2019,
pre-money valuations sustained a growth trend across all
Average 75th percen�le
quartiles, although at a slower pace than in 2018. Further,
the data also highlights a plateauing of valuations at the Median 25th percen�le
average, suggesting some tempering at the very top of Source: PitchBook | Geography: US
the market. We expect dealmaking at the late stage to
remain healthy in 2020, but the trajectory of valuations for
those deals seems slightly more in flux with the potential of

7 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 L ate -stage VC

increased scrutiny on operating efficiency driven by some Percentile distribution of late-stage VC

high-profile struggles in the public markets. pre-money valuations ($M)
Valuation step-ups climbed for the third-consecutive year, $600
reaching decade highs of 1.5x and 1.9x for the median
and average, respectively. The perseverance of this trend $500
in the face of some more muted changes in deal sizes
and valuations communicates how strong company-level
growth is at this stage. However, if a true inflection point $400
in deal sizes and valuations materializes over the next year,
late-stage step-ups will also see more pressure. The late- $300
stage RVVC tells a similar story of positive growth trends.
The trajectory of the line follows the movements seen in
step-ups, with impressive gains each of the last two years $200
to the current 2019 mark of 31.7%. By comparing these
two metrics, we observed that while the median step-
$100
up indicates a 50% valuation increase, the RVVC factors
in time, demonstrating the median company is growing
valuations 31.7% per year. $0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Average 75th percen�le

Median 25th percen�le

Source: PitchBook | Geography: US

Median and average late-stage VC valuation Median late-stage RVVC between rounds
step-up multiples
35%
31.7%
2.0x

1.9x 30%

1.8x
25%
1.7x
20.8%
1.6x
20%
1.5x

1.4x 15%
1.3x

1.2x 10%

1.1x
5%
1.0x
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
0%
Median Average
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: PitchBook | Geography: US
% growth in valuation between rounds
RVVC =
years between rounds

Source: PitchBook | Geography: US

8 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Nontraditional investors
Nontraditional investors—which include hedge and mutual Median early-stage VC pre-money valuation
funds, PE firms and corporate VCs, to name a few—have ($M) with nontraditional investor participation
become entrenched in the VC ecosystem in recent years.
$40
Once thought by many to be fleeting investors pumping up
$35.0
valuations and making decisions with the fear of missing
$35
out on the next unicorn, nontraditional investors have
continued to invest capital across the strategy, in some $30.0
cases moving earlier in investment lifecycle to take stakes $30
in younger startups. These investors are generally less
$25 $24.0
price sensitive than traditional VC firms. Hedge funds and
mutual funds have much larger pools of capital to invest,
naturally lowering the riskiness of VC investments, while $20
most corporate VC investments can factor in non-cash
$20.0
elements, such as partnership synergies, into total return. $15
In addition, because large nontraditional investors can be
multitudes larger than traditional VC funds, these firms $10
must achieve relatively larger returns to materially affect
their fund. These factors can drive higher prices paid by $5
nontraditional investors to ensure they win deals that can
achieve the returns needed, pitting nontraditional investors $0
against other participants in the industry.
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
The pre-money valuations of deals with nontraditional
Nontradi�onal investor No nontradi�onal investor
investor participation are considerably higher than deals
without nontraditional investment. Early-stage VC pre- Source: PitchBook | Geography: US

money valuations in deals with nontraditional investor

Median late-stage VC pre-money
participation have tripled over the last 10 years, bouncing
valuation ($M) with nontraditional investor
to a decade-high median of $35.0 million in 2019. This is
participation
$11 million higher than the same metric of deals without
$160
nontraditional backing, creating the largest spread $140.0
between the two values in our records. The same can be
$140
said for the spread observed at the late stage, in which the
median pre-money valuations of deals with nontraditional $120.0
investment reached a massive $140.0 million in 2019, a
$120
16.7% growth above 2018’s figure. Even more pronounced
is nontraditional investors’ ability to enable the enormous $100
deals that seem commonplace today. Of the 237 mega-
deals completed in 2019, more than 85% included $80
participation from a nontraditional investor. Hedge funds,
mutual funds and other investors, such as SoftBank, have $60 $49.5
$45.0
much larger capital pools to invest from than more classic
VC funds, and despite their frequent participation in $40
mega-deals, retain a relatively smaller exposure to the VC
industry within their portfolios. $20

Corporate VCs are the most active of the nontraditional $0

investor group, participating in around 1,800 deals during
each of the past two years, compared to the roughly 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
3,000 deals in aggregate in which nontraditional investors
Nontradi�onal investor No nontradi�onal investor
have participated. But compared to other nontraditional
Source: PitchBook | Geography: US

9 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Nontraditional investors

investors, CVC plays out more prominently in the early Median early-stage VC pre-money
stage. The costs associated with corporate growth can valuation ($M) with CVC participation
be high while the agility of large companies can be slow.
To combat this, corporations have sought to increase
$40
investment in startups either with the intention of adding $35.0
functionality to their offering with new technologies or $35
supplementing internal R&D programs. Though capital $30.0
appreciation is a desired effect of these VC investments, $30
the ability to leverage new technologies can enhance $25.5
potential returns in ways that create a pricing misbalance $25
in certain deals between CVCs and the rest of the industry.
Median CVC deal sizes at the early stage clock in at $13.2 $20 $21.0
million in 2019, higher than deals with other nontraditional
participation at this stage and roughly 2x the industry $15
median. Corporations flush with cash from the bull market
and faced with startups challenging for market share have $10
been eager to move capital toward startup investments,
doubling the number of participants over the past decade.
$5
Even amid potential economic headwinds, we believe
that startup investment will continue to become a more
$0
prominent part of corporate growth programs.
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

CVC investors No CVC investors

Source: PitchBook | Geography: US

CVC deal activity Median late-stage VC pre-money valuation

($M) with CVC participation
$80
1,846 $160
1,774
$70 1,668 $133.8
1,614 $140
1,486 1,557
$121.6
$60
$120
1,209
$50 $100
$80.5
$40 903 $80
$69.0
775
$30 596 $60
532
$20 $40

$10 $20
$13.4

$12.2

$16.8

$30.4

$39.3

$37.2

$38.8

$71.4

$56.1
$7.2

$8.5

$0 $0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Deal value ($B) Deal count
Source: PitchBook | Geography: US
CVC investors No CVC investors
Source: PitchBook | Geography: US

10 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Valuations by sector
Median pharma & biotech VC pre-money Median fintech VC pre-money valuation
valuation ($M) by stage ($M) by stage
$120 $300
$109.0

$100 $250 $242.5

$80 $200
$80.0

$155.0
$60 $150

$40 $100
$28.0
$25.0
$43.3
$20 $50 $30.0
$10.0
$9.1
$8.9
$7.5
$0 $0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Angel & seed Early VC Late VC Angel & seed Early VC Late VC
Source: PitchBook | Geography: US
Source: PitchBook | Geography: US

Median AI & ML VC pre-money valuation Median healthcare tech & services

($M) by stage VC pre-money valuation ($M) by stage
$160 $60
$147.5
$140 $50.0 $50.0
$50
$125.0
$120

$40
$100

$80 $30

$60
$20 $17.5
$17.0
$40 $30.0 $30.0
$10 $7.5
$20 $6.5
$7.1 $8.0

$0 $0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Angel & seed Early VC Late VC Angel & seed Early VC Late VC
Source: PitchBook | Geography: US Source: PitchBook | Geography: US

11 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Liquidity
Percentile distribution of VC-backed IPO valuations ($M)
$1,800

$1,600

$1,400

$1,200

$1,000

$800

$600

$400

$200

$0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Average 75th percen�le Median 25th percen�le

Source: PitchBook | Geography: US

2019 was an exceptional year for US VC exit activity. An Median IPO size ($M) by sector
unprecedented $256.4 billion in value was recorded in $900
the year, which will translate to some impressive returns $840.5
for both GPs and LPs in VC funds. This elevated amount $800
of capital exited was spread between a smaller number of
exits than the last couple of years, leaning on ever-larger $700
exits, specifically IPOs such as Uber, Lyft and Slack. The
top-quartile and average IPO are now valued squarely over $600 $611.1
$1 billion at $1.2 billion and $1.6 billion, respectively. The
disappointing aftermarket performance of some recent $500
VC-backed IPOs has caused public market investors to
$400 $335.3
question the massive valuations for money-losing startups.
The ramifications of this in the broader IPO market are yet $302.5
$300
to be seen, and while we expect strong companies will
still proceed with planned public listings, if this negative $200
sentiment remains prevalent through 2020, we may see a
lull in IPO activity, especially of technology businesses. An $100
extended dip in technology listings would put downward
pressure on the median and average IPO valuations given $0
that the median 2019 software IPO of $611.1 million is nearly
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
double the size of the median pharma & biotech listing of
$335.3 billion. These pharma & biotech IPOs make up a
So�ware Pharma & biotech
high proportion of total IPO count, and while we see that
as a steadier market given the established investor base Source: PitchBook | Geography: US

and proven path to the public markets, a serious enough

correction could also depress this activity.

12 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Liquidit y

IPOs grab many of the headlines around VC exits, but Percentile distribution of VC acquisition
acquisitions still make up a vast majority of exit count. And valuations ($M)
just like their steady volume, the range of valuations has
$300
remained remarkably stable from 2018. The bottom quartile
saw the only positive move by increasing 15.7% while the
average reverted closer to the top-quartile value. From 2013 $250
to 2019, the average has exaggerated moves on both the
upside and downside. As the data highlights, this bouncing
pattern where the average moves higher quickly and then $200
returns to the 75th percentile in the next period illustrates
the effects of abnormally large exits. $150

With the encouraging stability of acquisition valuations

and continued climb of IPO valuations on an absolute $100
basis, it is key to evaluate these options on a relative basis.
Encouragingly, step-ups for both exit options are over 1.0x, $50
implying positive returns for investors at least in the top 50%
of cases. The median step-up at acquisition has sustained
its upward momentum over the past two years, pushing $0
to 1.9x for the year. The increase in this metric despite the
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
consistent growth of valuations across all VC stages inspires
confidence in the health of the overall VC ecosystem. On
the flip side, the median IPO step-up is trending lower Average 75th percen�le
toward the 1.0x breakeven mark, with Q4 2019 touching Median 25th percen�le
that level. Any further struggles in the IPO market could Source: PitchBook | Geography: US
drop the median below 1.0x, indicating over 50% of IPOs
are completed at a lower price than companies’ last private-
market valuation. If faced with significant loses, investors
Median VC step-up multiples by exit type
may pull back support, which may prove detrimental to the 2.5x
VC market going forward, especially at the late stage.

2.0x

1.5x

1.0x
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

IPO Acquisi�on

0.5x
Source: PitchBook | Geography: US

13 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
 Deal terms
Proportion of VC deals with liquidation participation rights
60%

50%

40%

30%

17.6%
20%
14.0%

10%

0%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: PitchBook | Geography: US

Deal size and percentage acquired are key to the valuation Dividend terms for VC deals by dividend
discussion, but deal terms help cement these valuations rate bucket
by protecting investors from certain risks. Given that
terms have the most importance in the case of a negative 14%
outcome, there has been a sustained decline in many of the
most stringent protections because of the long-running bull 12% 11.7%
market. Between this rampant optimism and the increasing
bargaining power of entrepreneurs, the percentage of deal
10%
terms including liquidation participation rights has declined
9.9%
to a decade low of 14.0%. The abundance of capital in
venture over the last few years has enabled high-performing 8%
startups to more easily seek out term sheets from multiple
investors. This excess demand gives companies the
6%
opportunity to optimize terms and valuations to their goals,
which tend to be the deals that have more relaxed terms.
4%
Dividend terms have also tilted in favor of companies, 2.5% 2.5%
with trends continuing around fewer cumulative dividend 2% 2.2%
provisions and a greater proportion of lower dividend rates. 2.0%
Deals with 3.0% to 6.0% dividends (lower than the market
standard of 8.0%) moved to a decade high of 11.7% of all 0%
deals. The optimism emphasized by our deal terms data, 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
compounded with investors’ willingness to commit to larger
deal sizes at higher valuations, has led to at least a few 0-3% 3-6% 12+%
mispricings of VC-backed businesses. While a few of those Source: PitchBook | Geography: US
high-profile examples have seen recent struggles in the
exit market, we don’t expect any significant change in the
founder-favorable deal terms until a much broader downtick
in VC deal or exit activity occurs.

14 P I TC H B O O K 2019 A N N UA L U S VC VA LUAT I O N S R E P O R T
COPYRIGHT © 2020 by PitchBook Data, Inc. All rights reserved. No part of this publication may be reproduced
in any form or by any means—graphic, electronic, or mechanical, including photocopying, recording, taping,
and information storage and retrieval systems—without the express written permission of PitchBook Data,
Inc. Contents are based on information from sources believed to be reliable, but accuracy and completeness
cannot be guaranteed. Nothing herein should be construed as any past, current or future recommendation to
buy or sell any security or an offer to sell, or a solicitation of an offer to buy any security. This material does
not purport to contain all of the information that a prospective investor may wish to consider and is not to be
relied upon as such or used in substitution for the exercise of independent judgment.