Venture Financing Report - Q1 2012

Deal Volumes Slow on Mixed Valuation Data

Cooley LLP is pleased to present our findings on venture financings for Q1 2012, which can be found by clicking on the PDF link below. This report provides a summary of data reflecting our experience in venture capital financing terms and trends. Information is taken from transactions in which Cooley served as counsel to either the issuing company or the investors.

Overall, our data pointed to a quarter marked by slowing deal volumes and mixed valuation data across different deal stages. In Q1 2012, we saw aggregate dollars raised drop to approximately $1 billion, a significant dip from Q4 2011 levels. As mentioned, median pre-money valuations were mixed. Valuations dropped for both Series A and C rounds, while we observed increases in Series B and D+ rounds. Up rounds represented 76% of all financings in Q1 2012, consistent with Q4 2011 levels. Additionally, the percentage of recapitalization transactions fell in Q1 2012, as well as the number of tranched deals. Deal terms pointed to increasing investor caution. We observed increases in the use of fully participating preferred and pay-to-play provisions in Q1 compared to the prior year.

We hope you find this Report informative. Please let us know what other information you would find useful by contacting any of the Cooley partners listed at the end of the report or your local Cooley counsel.

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Related Contacts
Tom Coll  Partner San Diego
Craig Jacoby  Partner San Francisco
Ryan Naftulin  Partner London
Patrick Loofbourrow  Partner Singapore, Shanghai, San Diego
Mike Lincoln  Vice Chair Reston, Washington, DC
Babak "Bo" Yaghmaie  Partner New York
Pat Mitchell  Partner Boston, New York
Matthew Bartus  Partner San Francisco, Singapore, Palo Alto