Convertible Debt – Conversion In A Sale Of The Company
Feld Thoughts
SEPTEMBER 27, 2011
Usually we see 2-3x, but in later stage companies, this multiple can be even higher. In the case of an early-stage startup that hasn’t issued preferred stock yet, the debt converts into stock of the acquiring company (if it’s a stock deal) at a valuation subject to a cap. Typical language follows.
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