Fenwick Releases Second Survey of Terms of Unicorn Financings

Mountain View, CA (February 10, 2016)- Fenwick & West, one of the nation's premier law firms providing comprehensive legal services to high technology and life sciences companies, today announced the results of its second survey of the terms of unicorn financings. A "unicorn" is a venture capital backed company that closed a financing at a valuation of at least $1 billion.

The survey analyzed the terms of 52 U.S. based unicorn financings that closed in the nine months ended December 31, 2015.

"The survey results show that while overall the terms of unicorn financings during the survey period were similar to the terms in our prior survey, which covered the 12 month period ended March 31, 2015, there was a noticeable move to more investor friendly terms, such as IPO protections and senior liquidation preference, in the fourth quarter of 2015," said Barry Kramer, co-author of the survey and a partner in the corporate group of Fenwick & West.

"There was also a noticeable decline in the number of unicorn financings in the fourth quarter of 2015, compared to the second and third quarters of 2015, although it is too early to know whether this is the beginning of a long term trend of reduced investment in unicorns, the market taking a breather to recalibrate the terms and valuations of such financings, or a one quarter anomaly," continued Mr. Kramer.

The survey results also signaled the potential for a divergence in interests between early and late stage investors, as unicorn financing per share valuations were on average 57 times higher than the Series A valuation for such companies.

"The survey also found that the percentage of unicorn financings led by non-venture capital investors such as mutual funds and hedge funds increased to 84% during the period covered by the survey and that investors on average acquired 9% of the company in the unicorn financing," concluded Mr. Kramer.

Complete results of this most recent unicorn survey are posted on Fenwick & West's website at www.fenwick.com/unicornsurvey2​. The first survey is available at www.fenwick.com/unicornsurvey.

About Fenwick & West
Fenwick & West provides comprehensive legal services to ground-breaking technology and life sciences companies – at every stage of their lifecycle – and the investors that partner with them. We craft innovative, cost-effective and practical solutions on issues ranging from venture capital, public offerings, joint ventures, M&A and strategic relationships, to intellectual property, litigation and dispute resolution, taxation, antitrust, and employment and labor law. For more than four decades, Fenwick has helped some of the world's most recognized companies become and remain market leaders. For information about a career at Fenwick visit us at fenwick.com/careers​.