Venture Financing Report – 2012 Year in Review

Deal Volumes Slow as Valuations Stabilize

Cooley LLP is pleased to present our findings on venture financings for 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 year marked by slowing deal volumes and stabilizing valuations. In 2012, we saw aggregate dollars raised reach $4.9 billion, down from $6 billion in 2011. The decrease in both deal volumes and invested capital was driven by a slowing financing environment during the second half of 2012. Median pre-money valuations were relatively flat across all deal stages with the exception of Series B transactions. We saw an increase in up versus flat/down rounds. Up rounds represented 75% of all financings in 2012, a level not seen since 2007. Additionally, the percentage of recapitalization transactions fell in 2012, as well as the number of tranched deals. Deal terms also mirrored the financing statistics. The utilization of fully participating preferred provisions was relatively flat from 2011 and we witnessed a decrease in pay-to-play provisions in 2012, 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
Brent Fassett Partner, Colorado
Craig Jacoby Partner, San Francisco
Ryan Naftulin Partner, London
Patrick Loofbourrow Partner, Shanghai
Mike Lincoln Business Department Chair, Reston
Babak Yaghmaie Partner, New York
Pat Mitchell Partner, Boston
Matthew Bartus Partner, Palo Alto
Dave Young Partner, Los Angeles