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1. Variable Dividend Redeemable Preferred Stock (the “Demand Dividend”) –
This is useful when structuring a transaction with an equity like investment, including a timed exit feature. When using this structure, it is important to consult with a tax accountant/attorney
2. Loan (Promissory Note) Financing from a Foundation with Impact-triggered Default –
This is useful when considering an investment from a Foundation in the form of a debt instrument with a balloon payment at the end of the term. Note that this includes an impact-triggered default provision.
3. Redeemable Equity (redemption obligation) –
This is useful when considering an investment structured with a timed redemption obligation, making part of the investment debt like with a potential equity kicker provision.
4. Royalty Payment Convertible Note
Useful when considering a debt-like investment with a potential equity kicker provision.
US Tax Efficient structure using stock redemption and dividends for alternative exist
5. Recoverable Grant. Blended finance structure that allows a grant to be repaid to the donor as a loan if certain milestones are met