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June 2017 | Issue 86 Background Constellis Group,  Inc. is a private security firm.  In December 2013, the Company formed an Employee Stock Ownership Plan (“ESOP”), which purchased 100% of Constellis’s voting stock.  Wilmington Trust NA was named Trustee of the ESOP.  Less than a year after the ESOP was created, the ESOP sold all […] More...


March 2017 | Issue 85 Introduction Richard and Steven Parker are brothers who ran a flower business in Scotch Plains, New Jersey.  Richard is the President of Parker Interior Plantscapes (“PIP”), which installs and services plants and flowers in commercial settings.  Steven is the President of Parker Wholesale Florists (“PWF”), which is a garden center.  […] More...

Dell Appraisal Spawns a Multitude of Valuation Approaches

February 2017 | Issue 84 Introduction A Delaware Chancery appraisal case involving computer company Dell Inc. gave rise to a multitude of valuation measurements.  It is instructive to see how the court sorted through them in coming up with its final appraisal conclusion.  The case is In re Appraisal of Dell Inc., 2016 Del. Ch. LEXIS […] More...

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Silicon Valley Venture Financing – Down Rounds Predominate

June 2009 | Issue 39

A survey of first quarter 2009 Silicon Valley venture capital financings reveals that the proportion of down round financings exceeded up rounds by 46% to 25%, with 29% flat. This was the first time since the fourth quarter of 2003 that down rounds exceeded up rounds. In the fourth quarter of 2008, down rounds accounted for 33% of financings. The corresponding figure for the first quarter of 2008 was 19%.

A down round is defined as a transaction in which the price is lower than that of the previous round of financing.

Overall Prices Down
Not surprisingly, the magnitude of price changes in first quarter 2009 venture financings also underwent a downward shift as compared to 2008. The average overall per share price change from the previous round in first quarter 2009 financings was -3%, as compared to +25% for the fourth quarter of 2008, and +49% for the first quarter of 2008.

One bright spot in the survey was that the percentage of up rounds increased each month during the first quarter of 2009, (January – 17%, February – 29%, March – 35%). The survey covered 92 venture financings, and was carried out by Fenwick & West LLP, a global law firm specializing in services to high technology and life science clients. A copy of the report is available here.