Qualified Financing

A Qualified Financing is a financing round that meets pre-defined criteria in a convertible note or SAFE (commonly a minimum amount raised and/or a priced preferred equity round), which triggers automatic conversion of the instrument into equity. In seed documentation, Qualified Financing definitions are critical because they determine when conversion happens and at what price, and a Qualified Financing threshold can be negotiated to protect both founders and early investors.

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Ryan Roberts Startup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.