Authors: Michael Grantmyre and Ryan Unruch

Financing structure intelligence: preferred share financings

Conversion of convertible securities (such as SAFEs or convertible notes) in connection with financings, by series, by year

This graph displays the proportion of financings in which a convertible instrument (such as a SAFE or convertible promissory note) was converted in connection with financings included in the Deal Points Report, by year. In 2025, 61% of Series Seed financing rounds included the conversion of a convertible security, consistent with prior-year levels. Following Series Seed financings, data captured by the Deal Points Report show that fewer of these financings included the conversion of any convertible securities, with no convertible securities converting into any Series C financings in 2025 (the only incidence of this in the period covered by the Deal Points Report). This finding suggests a reduced reliance on convertibles as a mechanism to bridge valuation outcomes in later rounds.

Further analysis of the terms of convertible securities financings is provided in the “Convertible securities intelligence” section below. 

Post-financing available option pool size, by series

This chart shows both the average and median available option pool size, for companies that closed a financing round in 2025 — represented as a percentage of a company’s post-money fully diluted equity. The size of the post-closing available option pool is negotiated at the term sheet phase of a financing transaction, where any increase in the available option pool is typically counted in the pre-money shares and, as a result, reduces the company’s effective pre-money valuation.

Company covering investor fees in connection with the financing, capped vs. uncapped

Of the financings included in the Deal Points Report for 2025, the vast majority required companies to cover a portion of the lead investors’ legal fees. Of those financings where investor fees were covered, 95.3% included a fixed dollar cap on the reimbursable amount (meaning that “blank cheque” fee reimbursements are exceedingly rare). These findings are consistent with prior-year levels.

Financings with multiple closings, allocation of proceeds

In 2025, 31.7% of financings included multiple closings (compared to 28.8% in 2024). As in prior years, the majority of proceeds in a financing round continued to be funded at the initial closing.

Use of CVCA/NVCA based forms of principal agreements in financings

The chart below illustrates that the use of financing documents based on the CVCA/NVCA model documentation remained nearly ubiquitous for Canadian preferred share financings in 2025, with 96.8% of all financings relying on these model agreements. The use of a single unanimous shareholders agreement, which captures similar terms to those included in the CVCA/NVCA documents, has become inconsistent with standard market practice.

Osler’s Series Seed Financing Templates were introduced in 2026 to reflect prevailing market practice and to further align Canadian documentation with widely used NVCA-style forms.

Learn more about Osler’s Series Seed Financing Templates.

Existence of secondary transactions in financings, by series, by year

In 2025, secondary transactions remained a key part of the financing landscape. Series C and Series D and beyond financings saw the highest percentage of secondary transactions — at 60.0% and 28.6%, respectively — as companies sought to provide additional liquidity to early-stage investors and employees. As options for liquidity (including IPOs and acquisitions, to a lesser extent) have been more limited in recent years, the prevalence of secondary transactions at later-stage financings is expected to remain elevated, as early investors continue to seek alternative sources of liquidity. The relative value of the secondary component compared to round size and post-money valuation varied widely, ranging from 8% to 100% of the round size and from 2% to 25% of the post-money valuation.

Type of equity sold in secondary transactions in financings

In 63.6% of the 2025 secondary transactions included in the Deal Points Report, the purchaser acquired preferred shares (including transactions where secondary shares were exchanged for preferred shares in connection with the applicable secondary transaction). In the remaining 36.4% of secondary transactions, the investors purchased the same securities “as-is,” without any interim exchange of securities.

Average dollar amount of secondary transactions in financings, by series, by year (in millions of USD)

In 2025, the average dollar amount of secondary transactions by series increased materially across almost every stage of financing, in comparison to the prior years covered by the Deal Points Report. This is consistent with our expectations, as investors are increasingly looking to secondary transactions as an alternative means of generating liquidity for their investments in companies in the Canadian technology space.

Counsel opinions, capitalization opinions

For those financings completed in 2025 where company counsel delivered a legal opinion, the chart below indicates whether such legal opinion included a “capitalization opinion” (a legal opinion that helps confirm the completeness and accuracy of a company’s capitalization table). In 2025, for those financings that involved a legal opinion, 60% of the financings included a capitalization opinion from the company’s counsel (down from 70% in 2024). Consistent with trends in the U.S., investors are increasingly willing to close without a capitalization opinion in an effort to accelerate transaction timelines and reduce costs.

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• Financing terms intelligence: preferred share financings