RT Journal Article
SR Electronic
T1 Bridge Financing over Troubled Waters
JF The Journal of Private Equity
FD Institutional Investor Journals
SP 59
OP 63
DO 10.3905/jpe.2002.320034
VO 6
IS 1
A1 Timothy J. Harris
YR 2002
UL https://pm-research.com/content/6/1/59.abstract
AB Bridge financing raises needed capital between rounds of venture finance. In some cases, bridge finance, usually issued as convertible debt, is seen simply as prepaid equity in the next round of finance. In the heady days of the roaring '90s, this worked well and required minimal documentation. As times have changed, so must our practices. This article notes a series of trends in bridge finance terms, such as: longer timelines; more complex documentation; certain conditions precedent; maturity; pledge of collateral; restrictions of the use of proceeds; conversion upon acquisition or financing; and warrant coverage.