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…

Recently Yokum Taku of WSGR announced, together with TheFunded.com and Founder Institute, a new set of standard forms for an investment security called “Convertible Equity.”  The open sourced standard form documents can be found here:  term sheet, purchase agreement and convertible security. The release received a fair amount of attention in Techcrunch, among other publications, and in my Twitter feed.

First, kudos to Yokum, TheFunded and Founder Institute for attempting to further the causes of document standardization, lowering friction in fundraising and achieving greater balance between the forms of investment known as convertible debt and equity.  This is something that all of us in the startup ecosystem strive for, even, ahem, the lawyers.

Since then, many of us in the startup community have been asked by clients and others about this form of investment structure, and I thought I would make my thoughts known publicly.

Continue Reading…

Cooley LLP recently released its 2nd Quarter 2012 venture financing report.  The report analyzes Cooley’s venture capital transactions nationwide that closed during this period.

Highlights of the report include:

  • The percentage of up rounds rose to over 82% of deals, a level not seen since 2006.
  • Average valuations for Series A, B and D+ rounds reached levels not seen in the last eight years.
  • A number of Q2 trends pointed to a move toward more company-favorable terms.
  • The percentage of deals with pay-to-play provisions and the percentage of tranched deals decreased from the prior quarter, signaling investor confidence.

The full report can be downloaded here.