Venture Financing Report – Q3 2019 – Financing Environment Remains Robust

Despite current macroeconomic and political uncertainties, both deal volumes and aggregate dollars raised remained at historical highs in the third quarter of 2019. In Q3 2019, Cooley handled 264 disclosable deals, representing more than $7.6 billion of invested capital. Up rounds represented 87% of transactions during the quarter. Our data points to a notable increase in median pre-money valuations in Series A, B and D+ rounds, while valuations in Series Seed and C deals decreased. We also witnessed a spike in the number and percentage of deals with a median pre-money valuation greater than $100 million. Of particular note, five deals had valuations greater than $3 billion.

Deal terms during the quarter remained favorable to the company. Consistent with recent quarters, we saw less than 7% of deals with full participating liquidation preferences.

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Key insights from Gradient Ventures’ Anna Patterson

On asking for help from your investor: Repeat entrepreneurs ask for help more frequently. When you need help, ask for it. That’s what we are here for.

On building and retaining fans of your business: Having advocates in your customers, your employees and your board is paramount to your success. As you grow, keeping these people on board is even more important.

On company growth potential: I often ask entrepreneurs: “If your company had $30 million in the bank, what would you be doing differently?” If their answer sounds like a solid and promising growth trajectory, then why aren’t we pursuing that path?

Read Cooley’s full interview on Cooley GO.

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