The second quarter of 2020 represented the first complete quarter of private financings during the COVID-19 pandemic. Despite the multiple economic impacts of the crisis, our data showed resilience in the volume and valuations of deals completed. In Q2 2020, Cooley handled 304 disclosable deals representing more than $9.8 billion of invested capital. Both deal volumes and aggregate dollars raised decreased in June from April and May levels, a possible preview of future trends. Median pre-money valuations held steady in Q2 across deal stages, though we did see a decrease in valuations for seed transactions.

Surprisingly, deal terms during the quarter showed no significant shift toward an investor-friendly environment. While we did see a small uptick in preference multiples, just 5% of transactions had full participating liquidation preferences in Q2. Additionally, the percentage of deals utilizing pay-to-play provisions decreased from the prior quarter. Tracking these deal term trends in future quarters will be key to understanding the true impact of COVID-19 on the overall financing environment.

Industry spotlight: trends in life sciences

Following a surge in deal volume during the month of March, Cooley handled 64 life sciences-focused deals in Q2 2020, up 13% in volume over the same time period last year. Half of the deals were focused on earlier stage companies raising A and B rounds, an indication of continued investor appetite for new innovation in the sector. Aggregate deal value across all round types was $2.24 billion, a 43% surge from the same time period last year. To view more details on life sciences trends, use the "Life sciences" filter on the first four dashboards in our visualization.

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