注：大多数vc在决定给你投资1000万美元的时候，它们通常并不会一次性将1000万美元打入你的公司帐户，而是根据公司的发展(设置一些Milestone)达到不同的要求再继续入资。

Q: What type of structure have you seen where the VC agrees

to fund over some time period 18-24 months and up to some

level.

A: (Brad): These are commonly called “Tranched

Financings.” The typical approach is that a VC

commits to fund a specific amount in multiple “tranches” based on

the company achieving some milestones. For

example, assume a $10m financing broken up into two tranches - an

initial $5m investment on day 1 and another $5m investment after 12

months assuming the company “releases a product with performance

characteristics acceptable to the investor.”

There are numerous derivatives of this case. The valuation on each tranche (or price per share) can be held

constant or can vary (typically increase) for the second

tranche. The trigger (what causes the second

tranche to get funded) can either be under the VC control (similar

to a put option) or the company control (similar to a call

option). The amounts for each tranche can vary

(they don’t have to be the same) and there may be even more

tranches (I’ve seen situations where there are monthly tranches

over a twelve month period.) Finally, the

characteristics of the trigger vary widely.

An alternative approach is to have a warrant attached to the

financing round that is exercisable at the discretion of the

investor within some time period. This serves a

similar purpose to a tranched financing, but gives the investor

more control and potential option value in the case where the

company is acquired early before the warrant expires.

Tranched financings tend to come into play more frequently in

downside cases where a company and its investors are trying to

extend the company’s life either to an exit event or another

financing. In these cases, the investors want to

run a single process within their firms for getting approval for an

investment, but then want to maintain control over how much money

they invest at any given time in case the deal goes completely

south (leaving the flexibility to decide to pull the plug in the

hands of the investor.)

Occasionally tranches are used in the early stages of

investments although more recently I seen the “warrant approach”

instead of a tranched approach.