Convertible Bridge Notes: An Introduction to Their Uses, Accounting, and Valuation Considerations

Gavin Hagfors Josh Schaeffer, PhD

Equity transactions offer emerging growth companies some unique, creative ways to raise capital. One of them, tranched preferred stock, lets investors lock in future funding in advance by locking in favorable terms. In this issue brief, we follow up on the same theme by looking into an alternate tool, this time to solve an opposite problem: What happens when a company needs funding now, but isn’t ready for their next financing round.

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