08/13/2009
Cooley Report Highlights Q2 2009 Venture Capital Financing Trends
Early Markers Show Potential Improvement in Market Terms for Companies
Palo Alto, Calif. – August 13, 2009 – Cooley Godward Kronish LLP today released its most recent report on venture capital financing market terms. The report analyzes the Firm's venture capital transactions nationwide that closed during the second quarter of 2009, with comparisons to earlier periods. The analysis is based on 75 completed deals across the United States totaling approximately $835 million.
Highlights from the second quarter of 2009 include:
- The downward trend for up rounds has reversed this quarter with a higher percentage of transactions being up rounds as compared to the prior quarters.
- Median pre-money valuations increased from the low points seen in the prior two quarters which is a positive indicator that valuations may be rebounding.
- Fewer deals included pay-to-play provisions as opposed to the first quarter of 2009, though a significant number of deals continue to include onerous terms.
"Transaction volumes and valuations during this past quarter and during the first half of the year are still significantly below the levels seen during the same period last year, however, there do appear to be some encouraging early signs of improvement and a reversal of some of the downward trends of the prior two quarters," said Jim Fulton, head of Cooley's Emerging Companies practice.
Cooley's Private Company Financings Report is published quarterly and is based on private company transactions in which the firm served as counsel to either the issuing company or the investors. A complete version of the report is available here.
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