Tuesday, March 29, 2016

Repost: Mind the gap: A guide to bridge financing in the Middle East

LoanMost entrepreneurs hope that their fundraising efforts will result in a venture capital equity financing.  However, it is not uncommon for companies to meet their cash flow demands by raising convertible debt prior to or between equity rounds, and many angel investors will only participate in a new venture on this basis.

This type of debt is known as a “bridge loan,” as it is a short-term loan that is designed to fund the business until it can raise equity capital.

Bridge loans provide the company with funding in the form of debt that will convert into equity upon the achievement of certain milestones or occurrence of certain triggers.

Bridge financing provides unique opportunities and challenges to both entrepreneurs and investors.  We have set out the key features of convertible debt instruments…

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