Startup Terms Glossary
What is Qualified Financing?
When startups offer convertible securities, a certain dollar amount of capital must be raised in order for them to convert to shares in the equity of the company. Qualified financing refers to this specific dollar and varies based on the offering. When qualified financing is achieved, equity is distributed among investors holding the convertible securities, like Convertible Notes and SAFE Notes .
Qualified Financing Examples
Qualified financing applies to the following securities:
- Example 1. Convertible debt
- Example 2. Convertible preferred stock
- Example 3. Security finance
Here’s another web page about qualified financing and convertible notes.