Report Highlights Regional Differences in Venture Capital Financing

Cooley Godward Kronish Releases Report on Trends in Private Funding


PALO ALTO, CA--(Marketwire - August 14, 2007) - Cooley Godward Kronish LLP today released its most recent report on venture capital financing terms. The report analyzes the Firm's venture capital transactions nationwide that closed in the six quarters ending with the first quarter of 2007, as well as Q1 2007 trends. In addition, this issue of the report highlights key differences and similarities between East and West Coast private financing deals.

Overall, in the first quarter of 2007, later-stage financings cooled slightly while early-stage financings continued at a brisk pace. In addition, median company valuations for later stage transactions declined in the first quarter from their highs in 2006. The percentage of up-round financings -- transactions in which the valuation of the company increased relative to the prior round of financing -- declined steadily over the last year from a high of 88 percent in the first quarter of 2006. Even with the decline, up-round financings remain strong, accounting for 68 percent of all Q1 2007 deals.

Key regional trends highlighted in the report include:

--  Increased Interest in Multiple Liquidation Preferences on East Coast.
    The East Coast has witnessed a relatively steady decrease in deals with a
    simple 1X liquidation preference over the last several quarters. During the
    last three quarters there has been an increase in deals with multiple
    liquidation preferences. By contrast, deals on the West Coast have seen
    liquidation preference terms remain fairly steady from the fourth quarter
    of 2005 through the first quarter of 2007.
    
--  Early Stage Financing Trend on East Coast. Another distinguishing
    characteristic between regions is the differences between the number of
    Series C and later stage financings. From the fourth quarter of 2005
    through the first quarter of 2007, the West Coast accounted for an average
    of 36 percent of all Series C and later stage transactions, while the East
    Coast only saw an average of 21 percent during this same time period.
    
--  West Coast Yields Higher Median Valuations. Along with a greater
    percentage of later-stage transactions, the West Coast also had higher
    median valuations at each stage of financing. While the median pre-money
    valuation for Series A financing was only slightly higher on the West Coast
    than the East Coast, valuations were considerably higher for later-stage
    financings on the West Coast.
    

"The industry has long spoken about 'East Coast' versus 'West Coast' with respect to deal terms," said Jim Fulton, a partner in Cooley's Palo Alto office, and head of the Firm's Emerging Companies practice group. "While it's interesting to see some of the most significant differences, it's also important to keep in mind that there are generally more similarities than differences when it come to overall deal terms."

Cooley's Private Company Financings Report is published approximately every quarter and is based on private company transactions in which the Firm served as counsel to either the issuing company or the investors. A complete version of the report is available at www.cooley.com.

In 1959, Cooley formed the first institutional venture capital limited partnership in the western United States. Since then the Firm has been at the vanguard of private company financings, both as a representative of hundreds of venture capital and private equity partnerships and as counsel to companies and entrepreneurs raising money from the venture capital community. Industry sectors include all areas common to venture capital financings, including communications, computer hardware and networking, consumer electronics, general retail, Internet, life sciences, semiconductors, and software.

About Cooley Godward Kronish LLP

Cooley Godward Kronish's 600 attorneys have an entrepreneurial spirit and deep, substantive experience, and are committed to solving clients' most challenging legal matters. From small companies with big ideas to international enterprises with diverse legal needs, Cooley has the breadth of legal resources to enable companies of all sizes to seize opportunities in today's global marketplace. The Firm represents clients across a broad array of dynamic industry sectors, including technology, life sciences, financial services, retail and energy.

Cooley has full-service offices in major commercial, government and technology centers: Palo Alto, CA, New York, NY, San Diego, CA, San Francisco, CA, Reston, VA, Broomfield, CO, Washington, DC and Boston, MA.

For additional information, please visit www.cooley.com.

Contact Information: Media Contact: Ashley Kanigher Office: 415.732.7802 Cell: 415.786.2994 akanigher@cooley.com