Events

Convertible Debt vs. Priced Equity Rounds: Evaluating the Preferred Deal Structure for Early Stage Financing

May 11, 2021Next Month
Strafford
Webinar

1 - 2:30 pm ET | 10 - 11:30 am PT

Convertible note financings--and similar transactions, including agreements for future equity called SAFEs, have been a popular alternative for start-up investment financing due to the difficulty of obtaining a meaningful valuation determination and apparently less onerous documentation, sometimes making it a less costly option.

Despite the popularity of convertible debt deals, frequently, early-stage investors require priced equity rounds. Indeed, many investors prefer a priced equity round because it provides the investor with greater certainty regarding valuation and greater rights, privileges, and protections than convertible debt or SAFEs.

Counsel representing emerging growth companies and their investors must carefully consider each financing mechanism's pros and cons to evaluate the preferred structure for the particular deal.

Listen as our authoritative panel of finance and securities attorneys reviews the pros and cons of convertible debt and priced equity rounds for start-up investment financing. The panel will discuss current terms and trends for financing early stage companies and look at the issues from both entrepreneurs' and investors' perspectives.

Outline

  1. Current market terms and trends
  2. Convertible notes: key terms
  3. Priced equity rounds: key terms
  4. Pros and cons of each deal structure

Benefits

The panel will review these and other highly relevant issues:

  • Current terms and trends for financing early-stage companies
  • How to determine the preferred deal structure: convertible debt or priced equity rounds
  • Comparing and contrasting convertible notes vs. equity rounds