Q2 2018 – Invested Capital Spikes as Valuations Hold Steady

In the second quarter of 2018, both deal volumes and aggregate dollars raised remained at historically high levels. In Q2 2018, Cooley handled 224 disclosable deals, representing more than $7.5 billion of invested capital. This is the highest level of invested capital we have seen in a calendar quarter since the inception of this report. In Q2 2018, 86% of all transactions were up rounds, the highest percentage since Q4 2015. Median pre-money valuations remained strong in Series B and C financings, but cooled a bit in Series A and D+ deals.

Deal terms during the quarter continued to be company-friendly. Consistent with recent quarters, we saw just 9% of deals with full participating liquidation preferences. We also noticed decreases in the percentage of deals structured in tranches and in recapitalization transactions. However, the data did show an increase in the use of pay-to-play provisions in later stage deals.

GO Visualize (powered by Tableau)

Welcome to Cooley GO Visualize, which allows you to drill down on trends gleaned from deals we’ve worked on with entrepreneurs. The data you see here will be updated in conjunction with our quarterly VC Financing Reports. We hope you’ll find this and other Cooley GO resources such as the Convertible Note Term Sheet Generator and our guidance in Raise helpful in navigating and accelerating your fundraising efforts.