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On June 6, 2006, Cooley Godward LLP hosted a discussion in Palo Alto, CA on trends in venture terms. 

Recently more rounds have been seen in venture funding.  Many of the deals are tranched aka milestone based.  Tranched deals occur when a venture capitalist invests funds over a certain period, with the requirement that milestones be met prior to the disbursement of funds.  This provides the ability to invest additional funds at the same or increased valuation for period of time at the investor's discretion.  There has been a shift away from valuation adjustments aka clawbacks for failure by companies to meet specific milestones.

There has been a trend in bridge rounds where money is advanced as a loan that can be converted to equity.  The investor gets a discount off of future rounds as a result of investing early in a company.  The investor may also get a percentage of warrant coverage.  Warrants are similar to options.