Cooley Reports 2011 Venture Financings Marked by Rising Valuations

Palo Alto, Calif. – March 1, 2012 – Cooley LLP today released its most recent report on venture capital financing trends,  analyzing 400 U.S. venture financing transactions nationwide last year in which Cooley served as counsel to either the issuing company or the investors.  Among deals analyzed, aggregate dollars raised in 2011 reached more than $6 billion, the highest level reported on to date.

Highlights of the report include:

  • The number and percentage of deals with a pre-money valuation of greater than $100 million increased substantially. Seventeen percent of all deals reached such size, a level not seen since 2005.
  • Deals including fully participating preferred provisions dropped to just 23 percent, a level not seen in the previous five years.
  • All series of financings in 2011 saw an increase in average pre-money valuation over the prior year.
  • The level of up-rounds increased solidly over 2011, with an uptick seen in the final quarter of the year.
  • Pay-to-play provision use dropped to just six percent of 2011 deals.
  • The number of recapitalization transactions and tranched deals decreased, signaling strong investor confidence.

"The robust financing activity we saw in 2011, both in deal numbers and aggregate dollars raised, as well as the increasingly company-friendly deal environment, shows that venture investors and entrepreneurs seemed to be more focused on upside than on downside in 2011, and we expect that to translate into an active venture financing environment in 2012," said Craig Jacoby, head of Cooley's Emerging Companies practice. 

Cooley's Private Company Financings Report is published quarterly and is based on private company transactions in which Cooley served as counsel to either the issuing company or the investors.  The analysis in this report is based on 400 deals completed in 2011 across the United States, totaling approximately $6.1 billion. A complete version of the report is available here.

A robust technology sector resulted in a strong year for Cooley's corporate practices. Last year, Cooley LLP advised on 32 public offerings, including advising Zynga in its IPO – the largest Internet IPO at the time since Google's – in December and advising the underwriters in LinkedIn Corporation's IPO in May 2011.  Also last year, Cooley's M&A practice advised on more than 141 completed acquisitions for an aggregate deal value in excess of $9.5 billion.

About Cooley LLP

Cooley's 650 attorneys have an entrepreneurial spirit and deep, substantive experience, and are committed to solving clients' most challenging legal matters. From small companies with big ideas to international enterprises with diverse legal needs, Cooley has the breadth of legal resources to enable companies of all sizes to seize opportunities in today's global marketplace. The firm represents clients across a broad array of dynamic industry sectors, including technology, life sciences, venture capital, clean energy, real estate and retail.

The firm has full-service offices in major business and technology centers across the United States in Palo Alto, CA, New York, NY, San Diego, CA, San Francisco, CA, Reston, VA, Broomfield, CO, Washington, DC, Boston, MA and Seattle, WA.  The firm also has an office in Shanghai, China.

Related Contacts
Craig Jacoby Partner, San Francisco
Related Practices & Industries

Emerging Companies Fund Formation