What is Convertible Note Overhang?
Convertible notes and Simple Agreements for Future Equity (SAFEs) are widely used by startups to raise early-stage capital. However, where the terms of those agreements are overly generous to the early-stage investor, those agreements can create complexities in future financing rounds, particularly in the form of “liquidation preference overhang”. What is Liquidation Overhang? Liquidation overhang …