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Drill down on financing trends and data.
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202
reported venture financings for Q1 2024
Jump to 68 billion information
$6.1
billion of invested capital
Jump to description
Invested capital aligns with value seen earlier in 2023
64% rounds
Deal count remains about the same as last quarter
NonValued Information
32%
of deals were down rounds
48% handled
Cooley named #1 law firm in the US and globally for representation of companies in venture capital financings
Interactive data
Welcome to Cooley GO Visualize, which allows you to drill down on trends gleaned from deals we’ve worked on with entrepreneurs. The data you see here will be updated in conjunction with our quarterly VC Financing Reports.
We hope you’ll find this and other Cooley GO resources such as the Convertible Note Term Sheet Generator helpful in navigating and accelerating your fundraising efforts.
Q1 2024 Venture Financing Report
Invested Capital Increases at All Stages and Median Pre-Money Valuations Increase for Early Rounds, While Percentage of Down Rounds Reaches New High
Cooley handled 202 reported venture capital financings in Q1 2024 , representing $6.1 billion of invested capital. While the deal count remained about the same as last quarter, invested capital increased from the $4.3 billion seen in Q4 2023, aligning with invested capital seen earlier in 2023. In Q1 2024, deal volume remained the same or saw a slight increase across all stages of financing – except for Series Seed deals, which had a downtick from 83 reported deals in Q4 2023 to 66 reported deals in Q1 2024. Despite the relatively flat overall number of deals in Q1 2024 versus Q4 2023, the number of transactions per month in Q1 decreased sequentially. Invested capital increased across all stages of financing in Q1 2024, as compared to Q4 2023, with the biggest growth noted in Series D and later rounds, which increased from $451.7 million in Q4 2023 to $1.2 billion in Q1 2024.
Median pre-money valuations increased for early- and mid-stage financings, with the most significant increase seen in Series B rounds, which rose from a median of $130 million in Q4 2023 to $165 million in Q1 2024. Median pre-money valuations for Series C, Series D and later rounds decreased in Q1 2024, continuing the downward trend that started in 2023 for later-stage rounds. The percentage of deals with pre-money valuations greater than $100 million (at all stages) increased to 35% of deals – the highest percentage noted since Q2 2022.
The percentage of down rounds continued to increase during Q1 2024, reaching 32% of deals, the highest witnessed since the 2014 inception of this report. The percentage of deals representing up rounds decreased slightly to 65% in Q1 2024. Only Q3 2023 saw a lower percentage of up rounds, and the last three quarters are the only quarters in this report’s history when up rounds represented under 70% of transactions.
Perhaps unsurprisingly in light of the high percentage of down rounds, the percentage of deals with a recapitalization remained relatively high at 2.5% of deals for Q1 2024. Before Q2 2023, the percentage of deals involving a recapitalization had not risen above 2.5% of deals since Q4 2014. The percentage of deals with a pay-to-play provision increased to 8% of deals in Q1 2024, after dropping to 4.5% of deals in Q4 2023. This represents only the fourth time in this report’s history that the percentage of deals with a pay-to-play provision has exceeded 7% of deals. The percentage of deals with nonparticipating preferred stock remained very favorable to companies, representing 93% of deals for Q1 2024.
Despite the overall economic terms demonstrating continued strain, approximately 94% of transactions still had 1x nonparticipating preference, indicating other terms remained fairly neutral.
In PitchBook’s annual Global League Tables for 2023, for the fourth consecutive year, Cooley was named the #1 law firm in the US and globally for representation of companies in venture capital financings. PitchBook also designated Cooley as the most active firm – in the US and globally – for representing companies in all deals, inclusive of venture capital, mergers and acquisitions, and private equity. In addition, Cooley was named the second-most active law firm in the US and globally for representation of investors in venture capital financings and was ranked #1 overall for representation in venture financings in the industry sectors of pharma and biotech and healthcare services and systems.
Spotlight on technology
The deal volume and invested capital for tech company venture financings saw an increase in Q1 2024. The Q1 2024 numbers for tech company financings were in line with the numbers seen in Q1 2023, but still remained below the highs observed in 2021 and early 2022. Similarly, the average reported deal size of venture financings for tech companies rose to $26.1 million for Q1 2024, up from just under $17.7 million in Q4 2023. The Q1 2024 average was comparable with the averages seen in Q3 2022 through Q3 2023, but still lagged behind the high average deal sizes witnessed in 2021 and the first half of 2022.
Spotlight on life sciences
In Q1 2024, the deal count for life sciences company financings remained about the same compared to last quarter, but invested capital increased from the $1.4 billion reported for Q4 2023. Reported deal sizes for venture financings of life sciences companies also increased in Q1 2024 to an average deal size of $45.7 million, compared to only $30 million in Q4 2023. Despite having the same deal count as was reported in Q1 2023, the invested capital and average deal size both increased compared to one year ago, when invested capital was just more than $1 billion and the average deal size was only $20.9 million. The percentage of life sciences company venture financings structured in tranches continued a downward trend in Q1 2024 to 17% of reported financings for life sciences companies – down from the 23% noted in Q4 2023.
