Silicon Valley Bank's quarterly State of the Markets report breaks down the financial trends that are shaping the global innovation economy.

1. State of the Markets
Inside views on the health and productivity
of the innovation economy
Second Quarter 2018

2. State of the Markets: Second Quarter 2018
State of the Markets 2
4 Macro Snapshot: Long-Lived Bull Market
7 IPO Conditions: Value in the Face of Volatility
12 Late Stage: Another Round of Mega-Rounds
17 Global Perspective: Tension Over Tech
22 Special Report: Prepared for a Downturn?

3. State of the Markets 3
State of the Markets: Second Quarter 2018
The Good Times Roll, Even as Risks Rise
The bull market powers on, and money continues to flow into the innovation economy. At the same time,
we are seeing a reemergence of volatility and a bevy of new risks — including tighter monetary policy and
the specter of a trade war — but it’s still status quo for now in the capital markets.
Despite market turbulence, the first quarter of 2018 ushered in several high-profile IPOs, and consumer-
and enterprise businesses are finding success as public entities. Furthermore, companies reluctant to go
down the IPO route found alternative paths. After years of successful fundraising, the world remains
awash in capital, and sovereign wealth funds appear poised for even greater contributions. All of these
factors are expected to provide further tailwinds for the tech sector.
This remains an exciting time for tech around the globe, with some caveats. Innovation companies thrive
on open markets, and rich valuations could be undermined by strained geopolitics, wavering consumer
confidence and a releveling of investors’ portfolio mix as interest rates rise. While the good times roll,
economic cycles don’t last forever, and the trends don’t always point upward. For the moment, however,
it’s game on.
Bob Blee
Head of Corporate Finance

4. State of the Markets 4
Report Authors
Steven Pipp, CFA
Research Manager
spipp@svb.com
Bob Blee
Head of Corporate Finance
bblee@svb.com
Bob Blee heads SVB’s Corporate Finance Group, which
provides commercial banking, lending and guidance to late-stage
corporate technology clients throughout the United States.
Previously, Bob held a variety of roles in SVB’s California and
Midwest geographies, most recently heading seed, early and mid-
stage Infrastructure, Hardware, Consumer Internet and Fintech
banking in the Bay Area and Southern California, as well as SVB’s
national Mezzanine Lending practice.
Bob sits on the nonprofit board of the Network for Teaching
Entrepreneurship (NFTE) and the Silicon Valley Advisory
Council of the Commonwealth Club. He is also active with his
alma mater, the University of Illinois.
Steven Pipp is a Research Manager based in San Francisco, CA,
responsible for capital markets research and data-driven analysis of the
innovation economies that SVB serves globally.
Prior to his research role, Steven managed advisory and valuation
engagements for venture-backed technology companies as part of SVB
Analytics. Before joining SVB, Steven worked in Minneapolis, MN, as a
consultant and entrepreneur in clean energy technology.
Steven earned a Master of Science in Finance from Boston College and
a Bachelor of Science Business from the University of Minnesota. In
addition, he holds the Chartered Financial Analyst (CFA) designation.

5. This material including, without limitation, to the statistical information herein, is provided for informational purposes only. The material is based in part on information from third-
party sources that we believe to be reliable but which have not been independently verified by us, and for this reason, we do not represent that the information is accurate or
complete. The information should not be viewed as tax, investment, legal or other advice, nor is it to be relied on in making an investment or other decision. You should obtain
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About Silicon Valley Bank
For more than 35 years, Silicon Valley Bank has helped
innovative companies and their investors move bold ideas
forward, fast. SVB provides targeted financial services and
expertise through its offices in innovation centers around the
world. With commercial, international and private banking
services, SVB helps address the unique needs of innovators.

6. Visit svb.com to
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6
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