3 ms·
In practice it usually amounts to that, because the term of a typical convertible note is a bit longer than the amount of time a typical funding round is expect
by pg 16y ago
In practice it usually amounts to that, because the term of a typical convertible note is a bit longer than the amount of time a typical funding round is expected to last.
- cperciva 16y agoOk, but what if a company takes two rounds of convertible debt? Wouldn't the first one expire while the company is still burning through the second round? Or is it standard practice when a company raises a second round of convertible debt to extend the maturity of the first round?
- AdeoRessi 16y agoTwo rounds of convertible debt does not really happen, practically, since debt is the most senior security in a company. An investor doing more debt at a later point would not have much advantage over an investor that did debt in the first place. As a result, there is no premium for coming in earlier, when it is more risky. Early debt holders block issuing more debt, generally.