We are pleased to make available to you our quarterly update on dealmaking market trends and legal developments for Q1 2012.

In our quarterly update materials, we share the key trends in:

  • venture capital and emerging growth investing (overall investment decreased significantly on a year-over-year as well as on a sequential basis – software remained robust while investment in life sciences and biotech companies dropped precipitously)
  • venture capital fundraising (consolidation continued with less capital going into a smaller number of funds, and a key driver in decreased venture capital investment noted above)
  • private equity (deal flow dropped significantly both on a year-over-year and sequential basis, with activity more robust in the middle market)
  • capital markets and initial public offerings (Q1 2012 saw a sustained improvement in the IPO market, with venture-backed IPO activity showing its strongest opening quarter by number of deals and dollars raised since Q1 2007)
  • hopes that Facebook’s IPO would blaze the trail for 2012 met strong headwinds, with the after-IPO public trading for Facebook causing a pause in new issues)
  • mergers and acquisitions (tech M&A spending fell on both a year-over-year and sequential basis, as large buyers continued to maintain significant cash stockpiles)

In addition to sharing our observations on the key trends in each of these areas, we summarize significant legal developments that impacted them, including:

  • summaries of key provisions of the new Jumpstart Our Business Startups Act, including new reforms designed to create an "on-ramp" for emerging growth companies to the public markets and new IPOs, relaxation of some of the more restrictive aspects of Sarbanes-Oxley for a limited period, publicity, crowdfunding and other reforms designed to facilitate new fundraising in the private markets
  • a Delaware Chancery Court decision finding that a merger involving a controlling group of stockholders who received an interest in the surviving entity is subject to the entire fairness standard rather than the business judgment rule if appropriate procedural protections are not being used to protect minority stockholders
  • a southern district of New York case revealing that a letter of intent with non-binding terms can impose a binding obligation under New York law to negotiate within the framework of those terms, and that the obligation to negotiate in good faith may continue until the agreement terminates in its entirety
  • a Delaware Chancery Court decision that will chill the use of "don’t-ask-don’t-waive" standstills that, when combined with a no-shop, can compromise a board’s fiduciary out
  • new Hart-Scott-Rodino thresholds

To view and print our quarterly update materials, please click below:

First Quarter Update

Fourth Quarter Update
Third Quarter Update
Second Quarter Update
First Quarter Update

We hope you find this information useful and would be happy to answer any questions you might have regarding the update.


Louis Lehot and Kevin Rooney