Thinking about all the potential bridge extension rounds that will need to be closed in late 2024 and 2025, and here are my thoughts on the structure:

If you do equity, and assuming it’s the same valuation, you could do an ‘extension round’ which essentially builds off the prior preferred round. This would increase the authorized preferred shares of the last round, and the investors would purchase more of those same at the same price.  This takes minimal if any updates to the other financing documents.

With the extension round at the same valuation, your startup would need the following:

• Amendment to last SPA (to authorize more to be sold under the SPA and other updates) OR a new SPA with updated reps/warranties and other items
• Amendment to current COI (to authorize more of the series of preferred and common stock, if necessary)
• Board Consent
• Stockholders Consent
• Preferred Stockholder waiver (for any applicable protective provisions and to waive preemptive rights as applicable, to the extent someone is not participating) which could be integrated into the stockholders consent.

If your valuation is changing, either higher or lower, then it would take a newly created series of preferred and we’d have to amend the current certificate of incorporation, investors’ rights agreement, right of first refusal and co-sale agreement, and voting agreement. You are basically doing a whole ‘new’ round at this point and layering in the new security

Less often, I see the convertible structure used whether it’s a SAFE or convertible note. Of course, many investors have used the last 6-18 months to do down rounds and other pay-to-play structures, and you might see a hesitancy to do a convertible if they feel the valuation now is at an ‘all-time low’.

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