Pari Passu regains popularity in early-stage
.jpeg)
The use of pari passu as a liquidation structure has increased in early-stage, while remaining relatively consistent in late-stage, in the first half of 2024, according to data from Aumni-tracked equity financings.At the start of 2024, ~83.7% of early stage deals had a pari passu liquidation structure. This portion rose to ~86.8% of early-stage deals by mid-year. Meanwhile, in late-stage, the prevalence remained fairly stable, between 57.8% - 58.8%.
Pari passu is generally considered to be a relatively neutral set of terms while other, more structured terms, such as seniority ordered-by-equity-class (sometimes known as “standard” structure), tend to be thought of as investor‑friendly. The data supports the trend of structure remaining popular in late-stage. We recently noted that the prevalence of atypical liquidation preference rights and participating liquidation preferences are on the rise in Series C+, and that pay-to-play is spiking across various parts of the market
.jpg)
©2023 JPMorgan Chase & Co. All rights reserved. JPMorgan Chase Bank, N.A. Member FDIC.
This material is not the product of J.P. Morgan’s Research Department. It is not a research report and is not intended as such. This material is provided for informational purposes only and is subject to change without notice. It is not intended as research, a recommendation, advice, offer or solicitation to buy or sell any financial product or service, or to be used in any way for evaluating the merits of participating in any transaction. Please consult your own advisors regarding legal, tax, accounting or any other aspects including suitability implications, for your particular circumstances or transactions. J.P. Morgan and its third-party suppliers disclaim any responsibility or liability whatsoever for the quality, fitness for a particular purpose, non-infringement, accuracy, currency or completeness of the information herein, and for any reliance on, or use of this material in any way. Any information or analysis in this material purporting to convey, summarize, or otherwise rely on data may be based on a sample or normalized set thereof. This material is provided on a confidential basis and may not be reproduced, redistributed or transmitted, in whole or in part, without the prior written consent of J.P. Morgan. Any unauthorized use is strictly prohibited. Any product names, company names and logos mentioned or included herein are trademarks or registered trademarks of their respective owners.
Aumni, Inc. (“Aumni”) is a wholly-owned subsidiary of JPMorgan Chase & Co. Access to the Aumni platform is subject to execution of an applicable platform agreement and order form and access will be granted by J.P. Morgan in its sole discretion. J.P. Morgan is the global brand name for JPMorgan Chase & Co. and its subsidiaries and affiliates worldwide. Aumni does not provide any accounting, regulatory, tax, insurance, investment, or legal advice. The recipient of any information provided by Aumni must make an independent assessment of any legal, credit, tax, insurance, regulatory and accounting issues with its own professional advisors in the context of its particular circumstances. Aumni is neither a broker-dealer nor a member of any exchanges or self-regulatory organizations.
383 Madison Ave, New York, NY 10017
