JV & M&A

6 important questions on JV & M&A

What is convertible debt?

- Combination of debt and equity financing
- Convertible into equity at a later date
- Provides security of debt with potential equity upside

What is preferred convertible stock?

- Hybrid of preferred stock and convertible debt
- Investors receive preferred stock convert to common stock
- Participate in company's upside with preferential rights

What is revenue-based financing?

- Combo of debt and equity financing
- Investors receive percentage of future revenue
- Investor gets income stream and company growth potential
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How does mezzanine financing differ from traditional debt financing?

- Bridges the gap between senior debt and equity
- Involves higher interest rates and greater flexibility

How is mezzanine financing typically structured?

- Can be structured as a loan or preferred equity

What distinguishes preferred convertible stock from traditional equity financing?

- Investors receive preferential rights to dividends and other distributions

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