Debt financings pros - Study guides, Class notes & Summaries

EEE 4653 Venture Capital Exam 3 OSU With Correct Questions And Answers | Verified Solutions 2024

EEE 4653 EXAM 3 OSU (THOMISON) RATED A+

EEE 4653 Exam 3 Questions and Answers Graded A+ Debt Financings Pros - ANSWER: -Predominantly no ownership dilution --Except for Convertible Notes or Subordinated Note with "warrants" -Typically a lower cost of capital -Business income tax benefits (interest expense is tax deductible) -Potential for "value add" lenders - Business Advise & Networking --Tends to be Commercial or Community Bankers -Larger number of providers/sources & types of funding Debt Financings Cons - ANSWER: -P...

Venture Capital EEE 4653 Exam 3 OSU (Thomison) Convertible Note Capital Market - *Positive Attributes:* -Offers the potential to "bridge" current strong differences in Pre-Money Valuation. -Normally lowers external "closing costs" (i.e. legal, etc.) -Shorten funding timeline -Enables Investors to immediately & easily secure a "senior collateral" position PLUS seamlessly transition into a "para pasu" (i.e. equal) Liquidation Preference with the next investors versus being ...