Bridge Financing Conversion Finance 
Both Sides of the Table
MAY 15, 2010
Clearly a startup should consult its lawyer before filing or not filing.But the attorneys I relied on to write this piece told me that they’ve done lots of Section 4(2) deals in the past, and would recommend it to clients who had relatively simple financing agreements (not tranched-out, not too many investors, etc.) Short answer: no.
Gust
SEPTEMBER 29, 2011
It should therefore come as no surprise that an asymmetry of information exists, mostly gleaned from experience, between founders and investors in a venture financing deal. A term sheet for a convertible note deal may run two or three pages, versus 8-10 pages for a typical Series A Preferred Stock financing.
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Both Sides of the Table
SEPTEMBER 18, 2014
It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. These are all real conversations. What if when you have that conversation you don’t agree? Truthfully.
Both Sides of the Table
JUNE 27, 2021
We’ve had two companies where we had to bridge finance them several times before they eventually IPO’d We had a portfolio company turn-down a $350 million acquisition because they wanted at least $400 million. Consider: When GOAT started it was a restaurant reservation booking app called GrubWithUs … it’s now worth $3.7
K9 Ventures
MARCH 23, 2011
The convertible note was really intended as an instrument for a “bridge financing” – when an equity round was imminent, and likely to occur, but the company needed some money in between. In that case, it made good sense to have a debt instrument, where the note holder then converted into equity when the financing occurred.
Gust
SEPTEMBER 17, 2014
It’s like we need a finance 101 course for entrepreneurs. In finance they call it “terminal value” but the truth is the price is as arbitrary at your A round as it is at your seed round. These are all real conversations. What if when you have that conversation you don’t agree? There were no metrics. Last year ….
The Startup Lawyer
FEBRUARY 4, 2011
Thus your startup needs to determine the intangible value offered by the incubator (and yes, a $150,000 convertible note with no cap and no conversion discount qualifies as an intangible). Like any issuance of stock or investment, one of the main things a startup should be concerned with is: Is this going to fuck up a future financing ?
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