Drill down on financing trends and data.

Cooley handled 258 reported venture capital financings in Q4 2024, representing $8.8 billion of invested capital, both down slightly from last quarter but higher than in 2023 and early 2024. In Q4 2024, deal volume and invested capital decreased slightly across most stages of financing. The most significant decreases versus the prior quarter were in Series B deals, which decreased from 57 deals representing $3.9 billion in invested capital in Q3 2024 to 38 deals representing $1.4 billion in invested capital in Q4, and in Series D and later deals, which decreased from 22 deals representing $6.8 billion in invested capital in Q3 2024 to 18 deals representing $2.3 billion in invested capital in Q4 2024. In stark contrast, Series C deals significantly increased in both deal volume and invested capital, growing from 15 deals representing $1.2 billion in invested capital in Q3 2024 to 33 deals representing $2.6 billion in invested capital in Q4 2024, signifying the largest deal volume and invested capital for Series C rounds since Q2 2022. 

Median pre-money valuations increased across all Series A, B and C financings, while Series Seed financings remained about the same as last quarter, and Series D and later rounds saw a significant decrease from a median of more than $900 million in Q3 2024 to a median of $651 million in Q4 2024. In parallel to the uptick in the number of deals and amount of invested capital, the most significant increases in median pre-money valuations were at Series C, which rose from a median of $275 million last quarter to $360 million in Q4 2024. Series B round median valuations also increased meaningfully, rising from a median of $130 million to $166 million. The percentage of deals with pre-money valuations greater than $100 million (at all stages) increased to 35% of deals in Q4 2024, matching Q1 2024 – the highest percentage of deals with pre-money valuations greater than $100 million seen since Q2 2022. 

Down rounds, as a percentage of deals, decreased slightly in Q4 2024 to 19% of deals but remained relatively high compared to pre-2023 data. The percentage of deals representing up rounds increased to 80% in Q4 2024, compared to 75% in Q3 2024 – the highest percentage of deals representing up rounds seen since Q3 2022. The percentage of flat rounds decreased to 1.9% of deals for Q4 2024, compared to 2.8% of deals in Q3.  

 In Q4 2024, the percentage of deals involving a recapitalization decreased to under 1% of deals, representing the lowest percentage of deals involving a recapitalization seen since Q4 2022. Interestingly, and in contrast, the percentage of deals with a pay-to-play provision increased in Q4 2024 to 9.3%, the first time in this report’s history (since 2014) that the percentage of deals with a pay-to-play provision has exceeded 9%.  

Liquidation preference structures continued to remain favorable to companies, with 96% of deals having a “1x” liquidation preference, and 96% of deals having nonparticipating preferred stock. The percentages of deals with redemption provisions and accruing dividends, while still relatively low, both saw an increase favoring investors during Q4 2024. Deals with redemption provisions represented 6.2% of deals, and deals with accruing dividends represented 5.8% of deals in Q4 2024 – both the highest percentages witnessed for these provisions since Q1 2023.