Venture Financing Report - Q3 2014

Valuations Plateau on Company-Friendly Deal Terms

Cooley is pleased to present our findings on venture financings for Q3 2014, which can be found by clicking on the 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 robust deal volumes and an increase in early stage transactions compared to prior quarters. In Q3 2014, over 52% of deals were Series A transactions. Median pre-money valuations flattened during the quarter. Series A, B and C deals saw slight valuation decreases, while Series D+ deals saw valuation increases. We also saw another increase in up versus flat/down rounds from the prior quarter. Up rounds represented 84% of all financings in Q3. Deal terms in Q3 2014 were indicative of a company-friendly investment environment. We saw decreases in the use of fully participating preferred provisions in Series A and D+ transactions during the quarter. Additionally, the use of greater than 1x liquidation preferences decreased in Series A, B and D+ deals.

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