Despite the ongoing pandemic and various political and economic turmoil, Cooley's representation of emerging companies and venture investors in disclosable VC financings during the final quarter of 2021 was essentially on par with record-high deal volume and shattered the previous record for dollars raised. In Q4 2021, Cooley handled 392 disclosable deals (versus 399 in Q2 2021, the record), representing more than $25 billion of invested capital (versus more than $22 billion in Q2 2021, the prior record). Before Q2 2021, disclosable deals had not exceeded 355 deals for any quarter, and the largest amount raised reported for a quarter had not exceeded $19 billion. In all of 2021, we handled more than 1,475 disclosable deals, representing more than $84 billion of invested capital. This far exceeds the prior annual record of 1,310 disclosable deals and $47 billion of invested capital just set in 2020.
In Q4 2021, median pre-money valuations remained robust across deal stages, although our data does point to a slight decrease in valuations across all deal stages during December. We will continue to monitor valuations, but this decrease still left deals at favorable valuations. For example, median pre-money valuations for Series Seed deals during Q4 2021 reached $17 million, which may be a sign of an increased pool of funds available to early-stage companies. Likewise, median pre-money valuations for Series D+ transactions in Q4 reached more than $1.9 billion. During the quarter, Cooley handled 10 disclosable deals with pre-money valuations greater than $5 billion.
Overall, deal terms during Q4 remained company-friendly. Approximately 99% of our disclosable deals were "up" rounds, another record for this report. Similarly, more than 95% of disclosable deals in Q4 have non-participating preferred. In addition, the percentage of recapitalizations remained historically low. While we did see a slight increase in the utilization of pay-to-play provisions in Q4, pay-to-plays were only implemented in 4% of our disclosable deals.
According to PitchBook's Q3 2021 Global League Tables (full-year results pending at the time of this publication), Cooley advised clients on more company-side VC deals – in the US and globally – and US venture capital deals (total of company and investor-side deals) than any other law firm. To stay up to date on the latest industry insights and founder resources, visit Cooley GO.
Spotlight on life sciences
In Q4 2021, Cooley handled 82 disclosable financings of life sciences companies, representing more than $5.2 billion of invested capital. Both levels represented significant increases from the prior quarter. Deal sizes spiked, with an average deal size of more than $63 million in the quarter. Meanwhile, in a signal of investor caution, the percentage of life sciences transactions structured in tranches increased to more than 17% of deals, doubling from the prior quarter. To view more details on life sciences trends, use the "Life sciences" filter in our interactive data visualization tool.
Spotlight on technology
In Q4 2021, Cooley handled 211 disclosable financings of technology companies, representing more than $14 billion of invested capital. Both numbers increased markedly from the prior quarter. Average deal size during the quarter reached more than $66 million. To view more details on technology deal trends, use the "Technology" filter in our interactive data visualization tool.
View the interactive visualization on Cooley GO
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