-- Increased Interest in Multiple Liquidation Preferences on East Coast. The East Coast has witnessed a relatively steady decrease in deals with a simple 1X liquidation preference over the last several quarters. During the last three quarters there has been an increase in deals with multiple liquidation preferences. By contrast, deals on the West Coast have seen liquidation preference terms remain fairly steady from the fourth quarter of 2005 through the first quarter of 2007. -- Early Stage Financing Trend on East Coast. Another distinguishing characteristic between regions is the differences between the number of Series C and later stage financings. From the fourth quarter of 2005 through the first quarter of 2007, the West Coast accounted for an average of 36 percent of all Series C and later stage transactions, while the East Coast only saw an average of 21 percent during this same time period. -- West Coast Yields Higher Median Valuations. Along with a greater percentage of later-stage transactions, the West Coast also had higher median valuations at each stage of financing. While the median pre-money valuation for Series A financing was only slightly higher on the West Coast than the East Coast, valuations were considerably higher for later-stage financings on the West Coast."The industry has long spoken about 'East Coast' versus 'West Coast' with respect to deal terms," said Jim Fulton, a partner in Cooley's Palo Alto office, and head of the Firm's Emerging Companies practice group. "While it's interesting to see some of the most significant differences, it's also important to keep in mind that there are generally more similarities than differences when it come to overall deal terms." Cooley's Private Company Financings Report is published approximately every quarter and is based on private company transactions in which the Firm served as counsel to either the issuing company or the investors. A complete version of the report is available at www.cooley.com. In 1959, Cooley formed the first institutional venture capital limited partnership in the western United States. Since then the Firm has been at the vanguard of private company financings, both as a representative of hundreds of venture capital and private equity partnerships and as counsel to companies and entrepreneurs raising money from the venture capital community. Industry sectors include all areas common to venture capital financings, including communications, computer hardware and networking, consumer electronics, general retail, Internet, life sciences, semiconductors, and software. About Cooley Godward Kronish LLP Cooley Godward Kronish's 600 attorneys have an entrepreneurial spirit and deep, substantive experience, and are committed to solving clients' most challenging legal matters. From small companies with big ideas to international enterprises with diverse legal needs, Cooley has the breadth of legal resources to enable companies of all sizes to seize opportunities in today's global marketplace. The Firm represents clients across a broad array of dynamic industry sectors, including technology, life sciences, financial services, retail and energy. Cooley has full-service offices in major commercial, government and technology centers: Palo Alto, CA, New York, NY, San Diego, CA, San Francisco, CA, Reston, VA, Broomfield, CO, Washington, DC and Boston, MA. For additional information, please visit www.cooley.com.
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