Despite some uncertainty in the capital markets, overall venture investment activity remains strong, particularly in the software, IT, and Internet spaces. In addition, we are seeing more early-stage activity, especially in those sectors. Indeed, our quarterly survey of venture-funding transactions supports these observations and indicates a continued improvement in certain key metrics. For instance, the percentage of venture-funding transactions representing up rounds during the second quarter of 2012 increased significantly over those in the first quarter, to levels that are comparable to the last two quarters of 2011. In addition, the median valuations for post-Series A funding rounds during the second quarter increased sharply compared with the median valuations during the first quarter. These results indicate that the venture-funding environment continues to improve for entrepreneurs and venture-funded companies.
Moreover, our survey of the terms of the venture-funding rounds closed during the first half of 2012 echoes this trend. The percentage of deals during the first half of this year where senior liquidation preferences were used is lower compared with 2011 and 2010. Similarly, the percentage of deals with non-participating preferred stock increased during the first half of 2012 compared with 2011 and 2010.
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