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Cooley LLP recently released a report on venture financings for 2012. The 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.

The full report can be downloaded here.

Cooley LLP recently released its 3rd Quarter 2012 venture financing report.  The report analyzes Cooley’s venture capital transactions nationwide that closed during this period, representing 81 deals and over $960 million in invested capital.

Highlights of the report include:

  • Overall, the data pointed to a quarter marked by slowing deal volumes and decreased invested capital during the quarter.
  • In Q3 2012, we saw median pre-money valuations decline in Series A and B transactions. Additionally, the data showed a decrease in up versus flat/down rounds from the prior quarter.
  • Up rounds represented 71% of all financings in Q3, down from 77% in Q2.
  • The percentage of tranched transactions increased in Q3 to over 20% of all deals, though the percentage of recapitalization transactions decreased.
  • Deal terms in Q3 2012 remained mixed. We observed increases in the use of fully participating preferred and pay-to-play provisions in Q3, compared to the prior quarter. The data pointed to increased utilization of greater than 1x liquidation preferences in Series A and C deals, while showing a decrease in Series B and D+ transactions. Additionally, we saw a decrease in the use of drag-along provisions during the quarter.
Note that the report includes data from our recently opened Los Angeles (Santa Monica) office.

The full report can be downloaded here.

 

Cooley logoOn August 29, 2012, the Securities and Exchange Commission (SEC) issued a release proposing amendments to the rules governing private placements of securities (and resales of securities by institutional investors) that would allow companies to widely and publicly promote or advertise “private” sales of securities.

The SEC’s proposed amendments would: Continue Reading…