There is increasing chatter in the startup and investor space surrounding venture debt. It is not at all surprising that as the availability of ready capital has contracted considerably over the past two years, debt and...more
2023 was a pivotal year for the emerging companies, creating new categories of winners and losers across the board. Emerging companies incorporating artificial intelligence or that have clear line of sight to positive cash...more
Orrick's Founder Series offers monthly top tips for UK startups on key considerations at each stage of their lifecycle, from incorporating a company through to possible exit strategies. The Series is written by members of our...more
What’s a founder to do? Banks are collapsing; interest rates continue to creep upward; the IPO window remains limited; but growth-stage companies need capital and can only cut costs so much. With continued economic tightness...more
“Down rounds” and why they are contentious - Early-stage companies often raise capital in multiple rounds. While founders and investors hope that a company’s valuation is on a one-way trip upwards, the next round could be...more
As we ring in the lunar new year around the world, it is the year of the “rabbit” or of the “cat” depending on your version of the zodiac calendar. In Silicon Valley, it is going to be the year of the down round....more
The financial press has been reporting that investors are concerned that the United States economy may be heading toward a recession. In light of this and other factors creating uncertainty in the financial markets,...more
Down rounds have typically been seen in a negative light, but a recent Axios Pro Rata article raises an interesting point. If everyone raises a down round, does anyone really notice? Do they still have the same negative...more
Down rounds—equity financing rounds where the company’s valuation is lower than at least one of its previous rounds of financing—have been rare in the sellers’ market of the past few years, where high valuations fueled by an...more
From the Wilson Sonsini Database: Financing Trends for 1H 2020 - The second quarter of 2020 began amid significant business disruptions and market volatility associated with the COVID-19 pandemic. The potential impact on...more
COVID-19 has brought back financing terms not seen in the VC market since the last financial crisis. As valuations of public company comparables crumble and VCs engage in stricter price discipline, start-ups able to raise...more
The COVID-19 pandemic has caused—and will continue to cause—much uncertainty in the worldwide financial markets. We expect to see substantial declines in the coming months in the number and aggregate dollar value of venture...more
Just over a month ago, many sectors of the U.S. economy came to a sudden stop as the federal and state governments ramped up their efforts to contain the spread of the COVID-19 pandemic. As governors issued orders requiring...more
Although we all hope for a quick return to stability, the current environment raises the possibility of an increase in down-round financings—private company financings in which the company has a reduced valuation from its...more
Despite political and economic uncertainties, markets and deal activity were resilient in 2019, and strong fundamentals remain in place heading into 2020. Companies continue to face a challenging litigation and enforcement...more
In recent years, fintech has been an attractive sector for growth capital, as evidenced by robust investment and M&A valuations in the sector. While interest remained high in 2019, deal volumes began to level off early in the...more