-- Early-round financings continue their downward trend in median pre-
money valuations. Conversely, some later-round financings rebounded.
-- The percentage of deals with fully participating liquidation
preferences rose to 64 percent, a level not seen since 2006.
-- The first quarter of 2009 saw a dramatic decline in up rounds, and a
correspondingly significant increase in the number of flat or down rounds.
"In general we continue to see significant weakness in market terms for
companies, but in many cases the rate of decline has slowed," said Jim Fulton,
head of Cooley's
Emerging Companies practice. "Anecdotally, investors are still looking
to deploy capital but at lower valuations and at more aggressive terms.
The data in the first quarter report supports what we are hearing."
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. The analysis is based on 58
completed deals totaling approximately $800 million that closed in the
first quarter of 2009. A complete version of the report is available at
http://www.cooley.com/files/tbl_s5SiteRepository/FileUpload21/1628/PCF2009Q1-color.pdf.
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