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Bridge Note, Next Round Pricing with a Cap


Angel rounds can entail the direct sale of common stock. Another common structure currently in use, however, entails the issuance of a security which is designated a bridge note, convertible into either common or preferred stock at a price per share at a discount to the per share price of an equity security issued in an anticipated Series A round. Usually, the angel investors' bridge notes will be convertible into the Series A round security at a discount running from 20% to 30% of the Series A pricing in most cases.