Image Convertible Debt graph


Convertible debt financing continues to be an enormously popular method of fundraising for startups.

In this report, Fenwick has analyzed more than 100 of our issuer-side convertible debt transactions covering a 15-month period from January 1, 2018 through March 31, 2019. The data includes a survey of terms for first money and both early- and late-stage bridge deals.

It provides insight into what is market in convertible debt terms and will be of interest to founders, board members and investors.

Key findings include:

  • Year over year, deal sizes have continued to increase. The median overall deal size this year is up 14%, from $1.4 million to $1.6 million.
  • Conversion discounts are increasingly common, even in later-stage debt issuances, as is the practice of pairing the discount with a valuation cap.
  • In change-of-control situations, such as the sale of a company, most deals provide for a premium payout that is a multiple on top of the repayment of the principal balance. The number of deals giving a premium, as well as the median premium amount has remained steady year over year; however, this year the low end of the premium spectrum dropped from 25% to 10%.
  • Only 11% of deals used a valuation cap as a standalone provision in the absence of a conversion discount.


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