Although all rounds of financing can present their unique challenges, later-stage financings can be especially complex due to the fact that companies and investors are required to structure the transaction against a backdrop of prior investment rounds, terms and valuations that are not always consistent with current terms and valuations.
The challenge in later-stage financings is to raise new capital while minimally diluting prior investor ownership or share value. Because these later-stage financings can take different forms, the need for good capitalization modeling becomes essential.
This white paper takes a look at three typical later-stage financing scenarios and the unique challenges associated with them.
- Down Round Anti-Dilution Adjustments
- Recapitalizing Prior Investments
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