The study from law firm Fenwick & West found that 22% of the deals in the quarter had a lower per-share stock price. Only 11% of deals were down rounds in the first quarter.
Fenwick examined 124 technology and life sciences transactions it handled in Silicon Valley during the period.
While the increase is a sign of mounting deal pressure, it is not conclusive. The second quarter still saw 64% of deals marked as up rounds, and while this was slightly lower than in the first quarter, a bigger shift took place in flat rounds.
Twenty-one percent of deals were flat rounds in the first quarter compared with 14% in the second quarter, the study found. In other words, deals that would have been flat in the first quarter shifted down in the second.
Overall, the average per-share price increase for the companies raising money in the quarter – compared to their prior round of financing – was 62 percent. The median increase was a more modest 19%, compared with 29% in the year ago second quarter – also a sign of deal-making weakness.
The quarter also saw a rise in the use of senior liquidation preferences. Forty percent of deals employed them compared with 23% in the fourth quarter.
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