Unicorn financial negotiation balance is tilted toward investors

[Abstract] a lot of liquidity to chase entrepreneurs entrepreneurial golden window may be over, the difficulty of the future financing of venture capital companies are increasing.

 

Tencent science Ji Zhenyu February 12th Silicon Valley report

The field of

technology venture bubble whether, if it exists, the bubble extent? 10, firm Fenwick& a survey report released by West, the fourth quarter of last year, the "unicorn" company (more than $1 billion valuation) signed a number of investor protection than in previous quarters in terms of financing when increased, "negotiation balance" is moving towards the direction of tilt is more conducive to investors.

in the case of poor market environment, investors began to enhance the sense of self-protection. At the same time, it means that a lot of liquidity to chase entrepreneurs’ golden window may be over, the difficulty of the future financing of venture capital companies are increasing.

The

report shows that in the fourth quarter of 12 from the "unicorn" financing case, 50% lower than the previous price includes financing in IPO prices, investor protection provisions, these Provisions include requirements for at least IPO price is greater than or equal to the price of this round of financing, financing is lower than the previous price in IPO price, additional shares to investors "ratchet" clauses.

can be seen from the trend, the terms of the protection of investors increased significantly in the quarter, the third quarter was 35% in the second quarter was $25%.

a co-author, Fenwick & West Barry partner Kramer said, investors began to IPO may be lower than the risk of financing price more cautious. Last year, Square, Box, Hortonworks and other popular startups listed price is lower than the previous round of financing price of the case, the wind sounded the alarm bell.

in addition, another warning signal is that in the fourth quarter of financing, the financing of the valuation of the emergence of a decrease of 8%, and did not occur in the first quarter of the valuation of the financing of the two quarter down.

but from other key financing data provided by the report, the Silicon Valley venture capital environment remains stable, and no significant fluctuations. Unicorn average financing amount of $212 million in the fourth quarter, compared with $269 million in the third quarter declined slightly, but higher than the $second in the 179 million quarter.

Kramer pointed out that some of the companies in financing, in order to obtain the unicorn title, at the negotiations on the terms of financing concessions, more favorable terms for investors.

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