Palo Alto – April 20, 2016 – Cooley released its Q1 2016 Venture Capital Financing Report, which saw overall financing activity slowing down from previous quarters. Deal volume dropped 15% while invested capital decreased by 12%, as compared to Q4 2016.
"Valuations remained relatively strong, considering the market activity," said Craig Jacoby, head of Cooley's emerging companies practice. "There was also a small but noticeable increase in the percent of recapitalization transactions."
Notably, Series A deals made up 48% of Q1 transactions – a level not seen in more than a year. Median pre-money valuations increased in both Series A and Series C transactions, while declining in Series B and D+ deals.
Deal terms during the quarter remained mixed. The use of fully participating preferred provisions decreased from the prior quarter, while the use of drag-along provisions increased, primarily in Series A deals.
The report is based on disclosed transactions during the first calendar quarter of 2015, in which Cooley served as counsel to either the issuing company or the investor.
For more venture financing trends, view the interactive data visualization powered by Tableau on Cooley GO.
In Q1 2016, Pitchbook ranked Cooley as the #1 law firm for advising on both early- and late-stage venture capital financings.
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"Late Stage Valuations Continue to Slip in First Quarter," PE Hub
"Why 2016 Has Been a Terrible Year for Tech IPOs," San Francisco Chronicle
"Is the New Normal Really New?" TechCrunch