Trends In Legal Terms In Venture Financings In Israel 2012

Author:Mr Barry Kramer and Michael Patrick
Profession:Fenwick & West LLP
 
FREE EXCERPT

Background

We have analyzed the terms of venture financings for Israeli and Israeli-related technology companies that reported raising money during 2012. Our survey does not include financing rounds of less than US $500,000. The tables below also show, for purposes of comparison, the results of our previously released surveys.

Financing Round — The financings closed in 2012 and in the periods covered by our previous surveys may be broken down by types of round, or series, as follows:

Series 2012 2011 2010 2009 H2'08 H1'08 H2'07 H1'07 H2'06 A 39% 18% 20% 16% 30% 36% 36% 46% 35% B 31% 25% 28% 24% 30% 27% 32% 18% 27% C 12% 27% 30% 14% 16% 20% 14% 16% 24% D 13% 20% 10% 16% 12% 12% 11% 8% 7% E and higher 5% 10% 12% 30% 12% 5% 7% 12% 7% Price Change — The financings closed in 2012 and in the periods covered by our previous surveys may be broken down by the directions of the change in price as compared to each company's respective previous round, as follows:

Price Change 2012 2011 2010 2009 H2'08 H1'08 H2'07 H1'07 H2'06 Down 16% 25% 39% 30% 32% 18% 9% 31% 32% Flat 11% 9% 7% 17% 14% 0% 6% 4% 6% Up 73% 66% 54% 53% 54% 82% 85% 65% 62% The percentages of financing transactions that were down-rounds, broken down by series, were as follows:

Series 2012 2011 2010 2009 H2'08 H1'08 H2'07 H1'07 H2'06 B 14% 24% 24% 0% 23% 7% 0% 44% 7% C 25% 12% 27% 60% 29% 0% 25% 25% 54% D 11% 35% 71% 50% 20% 57% 17% 25% 25% E and higher 0% 30% 67% 36% 60% 33% 0% 17% 50% Liquidation Preference — Senior liquidation preferences were used in the following percentages of financings:

2012 2011 2010 2009 H2'08 H1'08 H2'07 H1'07 H2'06 76% 77% 69% 81% 83% 75% 75% 63% 72% The percentages of financing transactions with senior liquidation preference, broken down by series, were as follows:

Series 2012 2011 2010 2009 H2'08 H1'08 H2'07 H1'07 H2'06 B 45% 72% 48% 78% 69% 73% 78% 56% 67% C 22.5% 73% 82% 100% 86% 73% 63% 50% 77% D 22.5% 85% 71% 67% 100% 71% 67% 75% 75% E and higher 10% 80% 89% 82% 100% 100% 100% 83% 75% Multiple Based Liquidation Preferences — The percentage of financing transactions with senior liquidation preferences that included multiple preferences was as follows:

2012 2011 2010 2009 H2'08 H1'08 H2'07 H1'07 H2'06 3% 16% 8% 32% 10% 7% 22% 6% 4% Of the financings in which there were senior liquidation preferences based on multiples, the range of the multiples may be broken down as follows:

Range of multiples 2012 2011 2010 2009 H2'08 H1'08 H2'07 H1'07 H2'06 1x - 2x 100% 70% 100% 75%...

To continue reading

REQUEST YOUR FREE TRIAL