Overall financing activity in the second quarter of 2014 showed robust increases over the prior quarters. In Q2 2014, Cooley handled 87 deals representing over $1.5 billion of invested capital. Of particular note, the percentage of up rounds in the quarter reached more than 87% of deals, a level not seen since 2011. More than 44% of the transactions during the quarter were Series A deals, an increase from Q1. The data also pointed to a sizeable increase in median pre- money valuations for Series A transactions. In Q2, the median pre-money valuation for Series A deals hit $19 million, a level not seen in more than a year. However, median pre-money valuations decreased for Series B, C and D+ transactions. The percentage of Q2 deals with pre-money valuations greater than $100 million was 18%, a level also higher than the prior two quarters.

Second quarter deal terms were somewhat mixed, but in aggregate pointed to a company- friendly financing environment. Liquidation preferences of greater than 1x increased in all deal stages with the exception of Series C transactions. However, the percentage of deals utilizing fully participating preferred provisions decreased in all deal stages in Q2. Additionally, the percentage of recapitalization transactions and deals structured in tranches both decreased markedly from prior quarters, a signal of investor optimism. During Q2, pay- to-play provisions were not used in deals we handled. More than 85% of transactions utilized drag-along provisions during the quarter.