Valuations of Venture-Backed Companies Nearly Double from 2005

Authored by Mark Hefflinger on December 1, 2006 - 12:55pm.

San Francisco - Venture-backed companies in the U.S. are being valued almost twice as high as they were a year ago, according to a new report from Dow Jones VentureOne.

In the third quarter, the median pre-money valuation -- the values ascribed to businesses prior to funding rounds -- reached $20.4 million, up from $11.8 million in the third quarter of 2005.

The figure -- down slightly from the second quarter when valuations hit a six-year high -- was pushed higher by increased valuations in the information technology sector.

"Information technology companies have found a successful path to exit via mergers and acquisitions this year," said Steve Harmston, the director of global research for VentureOne. "As a result, private IT companies with promising exit potential are gaining higher valuations to reflect the current market conditions."

Related Links:
http://www.ventureone.com