While the economic terms of each investment are unique based on the facts and circumstances of the companies and investors participating, the Q1 2020 corporate venture capital survey indicates that the market may be shifting to more investor-favorable terms, as indicated by the increase in more restrictive provisions including redemption rights, series votes under the protective provisions, seniority in the liquidation stack vs. prior preferred rounds, and cumulative dividends.
In this survey, Morgan Lewis tracks investment trends as the market slowed for CVC financings at the end of the quarter as we entered the coronavirus (COVID-19) environment. We also analyze a survey of key economic terms of the largest venture capital investments during the first quarter of 2020 in which CVC programs either led the round or participated as significant or anchor investors.