Standard Term Sheet Terms from Recent Venture Investments

The most recent Silicon Valley Venture Capital Survey by Fenwick & West LLP just came out for Q3 2012. In it, the authors provide a great snapshot of anonymous financing terms for 117 companies based in Silicon Valley that raised money in the third quarter of 2012. Now, these companies are based in Silicon Valley where terms are usually more entrepreneur friendly, on average, compared to other parts of the country where capital is more sparse.

Here are some of the more interesting, high level notes taken from the report:

  • 61% of deals were up rounds compared to 22% flat and 17% down
  • Software continues to lead as the number one category with the most venture deals
  • 33% of deals had senior liquidation preferences
  • 17% of deals had multiple senior liquidation preferences
  • 33% of deals had participating preferred liquidation preferences
  • 11% of deals had cumulative dividends as a component
  • 97% of deals had weighted average anti-dilution provisions

Overall, the report showed financings were happening on even better terms than I expected with the majority of deals being clean (e.g. no liquidation preferences, not participating preferred, etc) — it’s a great time to be in technology. Please read the report for more information.

What else? What other interesting information did you take from the report?

2 thoughts on “Standard Term Sheet Terms from Recent Venture Investments

  1. …first round financings, whose median amount raised is on track to be $2.5 million for 2012, which would be the lowest annual amount since 1992.

    Why? Is it that much easier/quicker to build a business to get to the next round/break-even than previously?


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