Study: VC Deal Terms Indicate Investor Optimism
Venture capital sentiment continued to improve last quarter, according to a study of deal terms by law firm Cooley LLP. "In the first quarter of 2010 investment terms continued to be favorable -- a trend that began in the second half of 2009," said Craig Jacoby, head of Cooley's emerging companies practice. "While not all indicators are positive, we believe the trends are moving in the right direction and point to a healthier investment climate." The most positive indicator was that the percentage of up-rounds hit 58%, which is the highest level since Q3 2008 (its nader was a 16% mark in Q1 2009). Also increasing were the median pre-money valuations of Series A ($6.9m) and Series D or higher ($76.8m) rounds. Median pre-money valuations for Series B ($19.8m) and Series C ($32m) rounds fell from Q4 2009, but still came in higher than the year-ago period. Approximately 7% of all Q1 2010 deals had a pre-money valuation of $100 million or higher.
