Lewis Geffen discusses US venture capital trends and how they have migrated from the West Coast to the East Coast and vice versa. For example, East Coast investors have become more “company-friendly” with their terms, due to a change in mindset among successful investors who want to follow the West Coast model. This shift has prompted a decline on the East Coast in the use of accruing dividend provisions and participating preferred stock. Additionally, there are some trends migrating from East to West for different reasons, including See more +

Lewis Geffen discusses US venture capital trends and how they have migrated from the West Coast to the East Coast and vice versa. For example, East Coast investors have become more “company-friendly” with their terms, due to a change in mindset among successful investors who want to follow the West Coast model. This shift has prompted a decline on the East Coast in the use of accruing dividend provisions and participating preferred stock. Additionally, there are some trends migrating from East to West for different reasons, including a change in the venture industry since the financial crisis in 2008. For example, while East Coast investors have more frequently relied on a tranche deal structure, giving companies funding at certain milestones, that practice is now seen just as frequently on the West Coast. Also, with the implosion of VC firms, a lot of West Coast firms are now looking to syndicate their deals with investors who continue to finance companies as they grow, and are therefore introducing “pay to play” provisions, traditionally more popular with East Coast investors. See less -