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TOTAL DEAL VOLUME AND AGGREGATE DOLLARS RAISED. Overall deal volumes and
aggregate dollars raised decreased from Q2, but remained at historically strong levels.
$4
200
$3
150
$2
100
$1
50
$0
0
2013 | Q2
# of Deals
Amt (billions)
2013 | Q3 2013 | Q4
2014 | Q1
2014 | Q2 2014 | Q3
109
115
96
120
178
102
$1.28
$1.14
$1.13
$2.51
$3.66
$1.52
35%
38%
12%
27%
27%
26%
16%
48%
20%
10%
12%
17%
27%
43%
17%
24%
2013 | Q2
2013 | Q3
16%
15%
2013 | Q4
2014 | Q1
35%
12%
12%
transactions
remained historically
low during
27%
26%
48%
27%
43%
17%
19%
24%
10%
40%
14%
52%
23%
25%
2013 | Q4
2014 | Q1
2014 | Q2
2014 | Q3
Series A
Series B
Series C
Series D or Higher
*Quarterly analysis based upon 102 completed deals totaling approximately $1.5 billion in the third quarter of 2014; 178
completed deals totaling approximately $3.7 billion in the second quarter of 2014; 120 completed deals totaling approximately
$2.5 billion in the first quarter of 2014; 96 completed deals totaling approximately $1.1 billion in the fourth quarter of 2013; 115
completed deals totaling approximately $1.1 billion in the third quarter of 2013 and 109 completed deals totaling approximately
$1.3 billion in the second quarter of 2013. Please note our past quarterly deal numbers can change based on data not available
at the time of the report.
Q3 2014
attorney advertisement
PERCENTAGE OF UP, DOWN AND FLAT ROUNDS. The percentage of up rounds across all deal stages
reached more than 83% of deals, a level not seen since 2011.
100%
77%
75%
64%
78%
73%
80%
84%
50%
25%
0%
2013 | Q2 2013 | Q3
SERIES A
SERIES B
$50
$20
$14.4
$15
$15.9
$15.0
$40
$30
$10.5
$10
$8.1
$8.0
$35.0
$26.0
$10
$0
SERIES C
SERIES D or HIGHER
$150
$200
$125.0
$85.5
$55.0
$150
$97.5
$100
$60.9
$50
$200.0
$170.0
$120.0
$100
$0
$40.0
$20
$5
$0
$44.3
$38.6
$37.0
$130.6
$76.5
$140.0
$75.0
$50
$0
PRE-MONEY VALUATIONS OF MORE THAN $100 MILLIONBy Deal. More than 17% of Q3 deals had
a median pre-money valuation greater than $100 million. This was a slight decrease from the prior quarter.
25%
22%
18%
18%
20%
18%
17%
15%
8%
10%
5%
0%
2013 | Q2 2013 | Q3
LIQUIDATION PREFERENCEBy Series. Although a 1x liquidation preference remained the norm across
all series of financings, we observed a decrease in the use of greater than 1x liquidation preferences in
Series A, B and D+ transactions.
SERIES A
100%
80%
80%
60%
60%
40%
40%
20%
20%
0%
0%
<=1X
>1X-=<2X
>2X-=<3X
>3X
2013 | Q2100%
94.1%
2.9%
SERIES A
2.9%
0.0%
2013 | Q380%
96.8%
3.2%
0.0%
SERIES C
0.0%
0.0%
100%
2013 | Q460%
85.7%
5.7%
0.0%
0.0%
8.6%
80%
2014 | Q140%
97.5%
2.5%
0.0%
0.0%
0.0%
60%
2014 | Q2 20% 94.6%
5.4%
0.0%
0.0%
2014 | Q340%
0%
97.8%
2.2%
0.0%
<=1X
>1X-=<2X
<=1X
>1X-=<2X
20%
None
<=1X
>1X-=<2X
>2X-=<3X
>3X
None
95.6%
0.0%
SERIES B
0.0%
0.0%
4.4%
2013 | Q380%
87.5%
12.5%
0.0%
0.0%
SERIES D or HIGHER
0.0%
100%
2013 | Q460%
90.0%
10.0%
0.0%
0.0%
0.0%
80%
2014 | Q140%
91.3%
4.4%
4.4%
0.0%
0.0%
0.0%
2014 | Q260%
20%
91.4%
8.6%
0.0%
0.0%
0.0%
0.0%
0.0%
2014 | Q340%
0%
95.0%
5.0%
0.0%
0.0%
0.0%
>2X-=<3X
>3X
None
<=1X
>1X-=<2X
>2X-=<3X
>3X
None
>2X-=<3X
>3X
None
<=1X
>1X-=<2X
>2X-=<3X
>3X
None
2013 | Q2
100%
0.0%
20%
0%
0%
SERIES C
100%
SERIES D or HIGHER
100%
80%
80%
60%
60%
40%
40%
20%
20%
0%
SERIES B
100%
0%
<=1X
>1X-=<2X
>2X-=<3X
>3X
None
88.9%
11.1%
0.0%
0.0%
0.0%
2013 | Q2
2013 | Q3
83.3%
11.1%
0.0%
0.0%
5.6%
2013 | Q3
86.7%
2013 | Q4
88.9%
0.0%
11.1%
0.0%
0.0%
2013 | Q4
100.0%
2014 | Q1
93.8%
6.2%
0.0%
0.0%
0.0%
2014 | Q1
86.7%
2014 | Q2
96.3%
0.0%
3.7%
0.0%
0.0%
2014 | Q2
2014 | Q3
83.3%
16.7%
0.0%
0.0%
0.0%
2014 | Q3
2013 | Q2
<=1X
>3X
None
0.0%
0.0%
4.2%
6.7%
6.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
13.3%
0.0%
0.0%
0.0%
81.0%
14.3%
4.8%
0.0%
0.0%
100.0%
0.0%
0.0%
0.0%
0.0%
70.8%
>1X-=<2X
>2X-=<3X
25.0%
the percentage of deals utilizing fully participating preferred provisions in Series A and D+ transactions
during the quarter.
SERIES
SERIES
A A
100%
100%
80%
80%
80%
80%
60%
60%
60%
60%
40%
40%
40%
40%
20%
20%
20%
20%
0% 0%
100%
100%
0% 0%
NoneNone
2013 | Q280%
80% 0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
12.9%
2013 | Q3
79.2%
0.0%
4.2%
4.2%
SERIES
SERIES
D orDHIGHER
or HIGHER
12.5%
2013 | Q4
80.0%
5.7%
2.9%
0.0%
11.4%
2013 | Q4
50.0%
10.0%
5.0%
0.0%
35.0%
2014 | Q1
80.0%
7.5%
0.0%
0.0%
12.5%
34.8%
2014 | Q2
76.8%
1.8%
7.1%
1.8%
12.5%
86.7%
4.4%
2.2%
2.2%
4.4%
20%
20%
60%
60%
0%0%
40%
40%
2014
| Q3
NoneNone
0.0%
2x Cap
2x CapSERIES
3xSERIES
Cap
3x Cap
Cap Cap Full Full
B B>3x >3x
3.2%
3.2%
SERIES
SERIES
C C
40%
40%
80%
80%
0.0%
NoneNone
100%
100%
80.6%
2013
| Q2
80%
80%
0.0%
A A>3x >3x
2x Cap
2x CapSERIES
3xSERIES
Cap
3x Cap
Cap Cap Full Full
2013 | Q3
60%
60%
100%
100%
2x Cap
2x Cap 3x Cap
3x Cap >3x>3x
CapCap
60%
60%
100%
100%
40%
40%
80%
80%
2014 | Q1
52.2%
20%
20%
60%
2014 | Q2 60%68.6%
0%0%
2014 | Q340%
40%75.0%
Full Full
20%
20%
8.7%
4.4%
0.0%
8.6%
2.9%
0.0%
20.0%
5.0%
0.0%
0.0%
20.0%
NoneNone
2x Cap
2x Cap 3x Cap
3x Cap >3x>3x
CapCap
Full Full
NoneNone
SERIES
orDCap
HIGHER
SERIES
or HIGHER
2x Cap
2x
Cap
3xDCap
3x
> 3x>Cap
3x Cap Full Full
NoneNone
2x Cap
2x Cap 3x Cap
3x Cap > 3x>Cap
3x Cap Full Full
20%
20%
0% 0%
100%
100%
0% 0%
NoneNone
C C
2x Cap
2x CapSERIES
3xSERIES
Cap
3x Cap
> 3x>Cap
3x Cap Full Full
100%
100%
80%
80%
80%
80%
60%
60%
60%
60%
40%
40%
40%
40%
20%
20%
20%
20%
0%0%
0%0%
NoneNone
SERIES
SERIES
B B
100%
100%
2x Cap
2x Cap 3x Cap
3x Cap > 3x>Cap
3x Cap Full Full
2013 | Q2
0.0%
0.0%
0.0%
0.0%
2013 | Q3
83.3%
0.0%
5.6%
0.0%
2013 | Q4
33.3%
33.3%
0.0%
0.0%
2014 | Q1
75.0%
0.0%
0.0%
6.2%
2014 | Q2
92.6%
0.0%
0.0%
3.7%
2014 | Q3
66.7%
8.3%
16.7%
0.0%
2013 | Q2
0.0%
0.0%
0.0%
0.0%
0.0%
11.1%
2013 | Q3
33.3%
2013 | Q4
60.0%
6.7%
13.3%
0.0%
20.0%
44.4%
11.1%
22.2%
0.0%
22.2%
18.8%
2014 | Q1
40.0%
0.0%
6.7%
0.0%
53.3%
3.7%
2014 | Q2
42.9%
14.3%
14.3%
9.5%
19.0%
8.3%
2014 | Q3
55.6%
22.2%
11.1%
0.0%
11.1%
0.0%
39%
32%
30%
30%
23%
26%
22%
20%
10%
0%
60%
40%
20%
0%
2013 | Q2
2013 | Q3
2013 | Q4
2014 | Q1
2014 | Q2
2014 | Q3
Series A
23.7%
30.0%
25.0%
25.0%
34.2%
31.6%
Series B
18.4%
25.0%
35.7%
34.4%
29.0%
26.3%
Series C
13.2%
15.0%
21.4%
12.5%
5.3%
21.0%
Series D or Higher
44.7%
30.0%
17.9%
28.1%
31.6%
21.0%
15%
10%
9%
8%
6%
4%
5%
3%
3%
0%
2013 | Q2 2013 | Q3
TRANCHED DEALSBy Quarter. The percentage of deals structured in tranches rose slightly in Q3 from
30%
23%
20%
18%
17%
15%
12%
8%
10%
0%
2013 | Q2
PERCENTAGE OF DEALS WITH PAY-TO-PLAYBy Quarter and Series. The percentage of deals utilizing
10%
5%
6%
5%
4%
2%
3%
0%
2013 | Q2 2013 | Q3
60%
40%
20%
0%
Series A
2013 | Q2
2013 | Q3
2013 | Q4
2014 | Q1
2014 | Q2
2014 | Q3
0.0%
0.0%
0.0%
0.0%
3.2%
3.4%
Series B
0.0%
4.2%
0.0%
9.5%
0.0%
15.4%
Series C
44.4%
0.0%
12.5%
0.0%
0.0%
0.0%
Series D or Higher
16.7%
14.3%
0.0%
9.1%
7.1%
0.0%
100%
90%
82%
80%
70%
82%
80%
72%
66%
65%
60%
50%
2013 | Q2
2013 | Q3
2013 | Q4
2014 | Q1
2014 | Q2
2014 | Q3
Series A
73.5%
67.7%
77.1%
85.0%
85.7%
80.0%
Series B
82.6%
66.7%
80.0%
87.0%
88.6%
85.0%
Series C
66.7%
72.2%
77.8%
62.5%
77.8%
83.3%
Series D or Higher
50.0%
86.7%
55.6%
100.0%
76.2%
66.7%
included broad-based weighted average anti-dilution protection, a slight increase from the prior quarter.
The chart below breaks down the percentage of deals with broad-based weighted average, narrow-based
weighted average, full ratchet, and no anti-dilution protection.
100%
80%
60%
40%
20%
0%
2013 | Q2
2013 | Q3
Narrow-Based
Wgt-Avg
2013 | Q4
2014 | Q1
Full Ratchet
2014 | Q2
Broad-Based
Wgt-Avg
2014 | Q3
None
Series
SeriesB B
Series B
Series
SeriesC C
Series C
80%
80%
80%
60%
80%
60%
60%
60%
60%
40%
60%
40%
40%
40%
40%
20%
40%
20%
20%
20%
20%
0%
20%
0%
0%
0%
100%
100%
100%
80%
80%
100%
80%
60%
60%
80%
60%
40%
40%
60%
40%
20%
20%
40%
20%
0%
0%
20%
0%
Series
SeriesA A
Series A
Series
SeriesB B
Series B
Series
SeriesC C
Series C
Series B
Series C
Series D or higher
Series A
Series B
Series C
Series D or higher
Series A
Series B
Series C
Series D or higher
0%
Series
SeriesD or
D orhigher
higher
Series D or higher
Series
SeriesA A
Series A
Series
SeriesB B
Series B
Series
SeriesC C
Series C
Series
SeriesD or
D orhigher
higher
Series D or higher
Series A
Series B
Series C
Series D or higher
20%
20%
40%
20%
0%
0%
20%
0%
0%
Series
SeriesA A
Series A
Series
SeriesB B
Series B
Series
SeriesC C
Series C
Series
SeriesD or
D orhigher
higher
Series D or higher
Series A
Series B
Series C
Series D or higher
2014
2014| Q3
| Q3
80%
80%
60%
60%
40%
40%
20%
20%
0%
0%
Series
SeriesB B
Series B
Series
SeriesC C
Series C
Narrow-Based
Wgt-Avg
Series A
Series
SeriesD or
D orhigher
higher
Series D or higher
Series
SeriesA A
Full Ratchet
Series
SeriesB B
Broad-Based
Wgt-Avg
Series B
Series B
Series C
Series C
Series D or higher
Series D or higher
2014 | Q3
100%
100%
100%
Series
SeriesA A
Series A
0%
Series A
2014 | Q2
2014 | Q2
100%
100%
100%
80%
80%
100%
80%
60%
60%
80%
60%
40%
40%
60%
40%
2014
2014| Q2
| Q2
2014 | Q3
100%
100%
100%
80%
80%
80%
60%
60%
60%
40%
40%
40%
20%
20%
20%
0%
0%
0%
0%
2013
2013| Q4
| Q4
2014 | Q1
2014 | Q1
2014
2014| Q1
| Q1
2014 | Q2
100%
100%
100%
80%
80%
80%
60%
60%
60%
40%
40%
40%
20%
20%
20%
0%
0%
0%
100%
100%
80%
2013
2013| Q3
| Q3
2013 | Q4
Series
SeriesD or
D orhigher
higher
Series D or higher
2013 | Q4
100%
100%
80%
2013
2013| Q2
| Q2
2013 | Q3
Series
SeriesA A
Series A
100%
100%
Series A
100%
100%
100%
80%
80%
80%
60%
60%
60%
40%
40%
40%
20%
20%
20%
0%
0%
0%
2013 | Q3
2013 | Q3
Series
SeriesC C
Series
SeriesD or
D orhigher
higher
None
100%
100%
80%
80%
80%
60%
60%
60%
40%
40%
40%
20%
20%
20%
0%
0%
0%
Series A
Series A
Series B
Series B
Series C
Series C
Series D or higher
Series D or higher
see a gap in the usage of redemption and accruing dividend provisions between the SF Bay Area/Silicon
Valley and other geographic regions during Q3 2014.
ACCRUING
DIVIDENDS
ACCRUING
DIVIDENDS
REDEMPTION
PROVISIONS
REDEMPTION
PROVISIONS
50%
50%
25%
25%
40%
40%
20%
20%
30%
30%
15%
15%
20%
20%
10%
10%
10%
10%
5%5%
0%0%
0%0%
20132013
| Q2| Q220132013
| Q3| Q320132013
| Q4| Q420142014
| Q1| Q120142014
| Q2| Q220142014
| Q3| Q3
20132013
| Q2| Q220132013
| Q3| Q320132013
| Q4| Q420142014
| Q1| Q120142014
| Q2| Q220142014
| Q3| Q3
No CA
14.6%
10.2%
8.8%
6.7%
11.1%
11.4%
No CA
6.4%
4.1%
2.9%
4.4%
1.2%
2.9%
Other
44.3%
36.4%
30.6%
28.0%
33.0%
20.9%
Other
14.8%
21.2%
14.5%
13.3%
13.4%
19.4%
About The Cooley Venture Financing Report. This quarterly report provides data reflecting Cooleys 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 investors. For more information regarding this report, please contact the Cooley attorneys
listed below.
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