Q1 2021 Venture Financing Report –
A Strong Start to the Year

The robust financing environment we saw throughout the latter half of 2020 continued into the first quarter of 2021. Cooley handled 339 disclosable deals in Q1. This is relatively consistent with the prior quarter, but with an increase to more than $18.8 billion of invested capital – a record for this report, which has been published for more than 15 years.

During Q1, median pre-money valuations increased across substantially all deal stages, with only seed-stage transactions seeing relatively flat valuations compared to the prior quarter. Of note, the percentage of Q1 transactions with a median pre-money valuation greater than $100 million reached 40% of deals, a jump from prior quarters. As another signal of the continued strength of the financing environment, the percentage of up rounds again reached 93% of all deals, consistent with Q4 2020.

Deal terms continued to favor companies. In Q1, the percentage of deals using full participating liquidation preferences remained low at fewer than 6% of transactions. Additionally, the data pointed to decreases in recapitalizations and tranched deals.

Spotlight on life sciences

In Q1, Cooley handled 77 disclosable life sciences company financings representing more than $4.8 billion of invested capital, a record high for this report. As we witnessed in Q4 2020, deal sizes continued to surge. In Q1, the average life sciences deal size was $62.5 million, dwarfing the Q4 2020 average of $40 million. Of note, the percentage of life sciences deals structured in tranches again dropped to just 13% of transactions, continuing a trend seen in prior quarters. To view more details on life sciences trends, use the “Life Sciences” filter in our interactive data visualization tool.

Spotlight on tech

Cooley handled 184 disclosable technology company financings representing more than $9.6 billion of invested capital in Q1, marking a surge from prior quarters. Technology company deals represented more than 54% of our disclosable transactions in the quarter. As a signal of investor optimism and company-favorable terms, more than 93% of technology company financings were up rounds during the quarter. To view more details on technology sector trends, use the “Technology” filter in our interactive data visualization tool.

Visit Cooley GO to view the interactive visualization

Related Contacts
Aaron Archer Partner London
Matthew Bartus Partner – Singapore and Principal – Hong Kong Singapore, Hong Kong
Will Cai Partner Hong Kong, Palo Alto
Karen Elizabeth Deschaine Partner San Diego
Sonya Erickson Partner Seattle
Nick Hobson Partner Los Angeles
Stephane Levy Partner New York
James Lu Partner Shanghai, San Diego
Andrew Lustig Partner Reston
Danielle Naftulin Partner Palo Alto
Brooke Nussbaum Partner Washington, DC
Ferish Patel Partner in Charge – Singapore Singapore, Hong Kong
Noah Pittard Partner Colorado, Washington, DC
Rachel Proffitt Partner San Francisco
Joshua Rottner Partner Boston
Peter H. Werner Partner San Francisco
Henry Yin Partner Hong Kong
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