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

Pros and Cons of Different Financing Options for Entrepreneurs and Investors

Recording of a 90-minute premium CLE video webinar with Q&A


Conducted on Tuesday, May 11, 2021

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will discuss the pros and cons of SAFEs, convertible debt and priced equity rand how to evaluate the optimal deal structure for start-up investment financing rounds. The program will present perspectives from both issuers/owners and investors, as well as look at the current terms and trends for financing early-stage companies.

Description

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.

READ MORE

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

Faculty

Kerwin, Terrence
Terrence M. (Terry) Kerwin

Partner
Fox Rothschild

Mr. Kerwin is a partner in the firm's Corporate Department. He works with clients across a range of industries, and...  |  Read More

Sigety, Elizabeth
Elizabeth D. Sigety

Partner & Chair, National Emerging Companies & Venture Capital Practice
Fox Rothschild

Ms. Sigety focuses on a wide variety of corporate, venture finance, franchising, licensing and distribution matters....  |  Read More

Access Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

CLE On-Demand Video

Download