Convertible Guarantee Notes (CGNs) | Hybrid Security Solutions for Growth-Stage Financing
NNRV Trade Partners | Hybrid Security Solutions for Growth-Stage Financing
🔹 Debt-to-Equity Flexibility | Downside Protection | Upside Participation
⚠️ Struggling to Secure Growth Capital Without Dilution?
A Series B biotech startup avoided 35% equity dilution by using our Convertible Guarantee Note to:
✅ Secure $25M in debt financing with 85% principal guarantee
✅ Maintain optional conversion at 20% discount to next round
✅ Attract tier-1 VCs through embedded warrant coverage
« NNRV’s CGN structure gave us runway without surrenderring control. We converted only 60% while keeping our valuation intact. »
– CEO, Biotech Unicorn, Boston
💼 What Are Convertible Guarantee Notes?
Innovative hybrid instruments combining:
▪ Senior Debt Security (Guaranteed principal repayment)
▪ Equity Conversion Option (Typically at 15-25% discount)
▪ Warrant Coverage (5-15% upside participation)
Key Structures:
✔ European-Style (Single conversion trigger)
✔ American-Style (Multi-trigger conversion)
✔ Ratchet-Protected (Anti-dilution safeguards)
✅ Investor & Issuer Benefits
| Feature | Issuer Advantage | Investor Protection |
|---|---|---|
| Principal Guarantee | Lower cost of capital | 80-100% downside cover |
| Equity Participation | Deferred dilution | 1.5-3x upside potential |
| Covenant-Lite | Operational flexibility | Cash sweep triggers |
| Cross-Default Shield | SPV isolation | Bankruptcy remoteness |
🏦 Approved CGN Underwriters
| Institution | Specialization | Min. Ticket | Guarantee Level |
|---|---|---|---|
| Goldman Sachs Growth Credit | Pre-IPO Tech | $15M | 90% principal |
| Morgan Stanley PE Solutions | Biotech/Pharma | $25M | 85% + warrants |
| UBS Venture Debt | CleanTech/Web3 | $10M | 75% with ratchet |
| Citi Convertible Desk | Cross-over deals | $50M | 95% AAA-wrap |
(🔄 Secondary market liquidity through dedicated CGN trading desks)
📋 Documentation Suite
✔ Guarantee Trust Agreement (Delaware/English law)
✔ Conversion Mechanics Schedule
✔ Warrant Instrument
✔ Valuation Adjustment Rider
✔ Investor Rights Side Letter
🔄 7-Step Execution
Capital Structure Analysis (Optimal debt/equity mix)
Guarantor Syndication (A-rated monolines)
Conversion Pricing Model (Liquidity/volatility matrix)
Ratchet Mechanism Design
Roadshow Preparation (Investor deck + term comparisons)
Closing & SWIFT Settlement
Conversion Monitoring Portal
📊 CGN vs Alternative Instruments
| Instrument | Guarantee Level | Conversion Premium | Covenant Strictness |
|---|---|---|---|
| CGN | ⭐⭐⭐⭐ | 15-25% discount | Light |
| SAFE | ⭐ | 20-30% discount | None |
| Convertible Bond | ⭐⭐ | At-market | Heavy |
| Traditional VC Round | N/A | N/A | Board control |
🚀 NNRV Differentiators
✔ Patent-Pending Ratchet Algorithm (Dynamic anti-dilution)
✔ Guarantor Marketplace (Competitive bidding among 12+ insurers)
✔ Conversion Arbitrage Desk (Secondary market optimization)
✔ Portfolio Company Dashboard (Real-time conversion analytics)
📌 Market Parameters
Typical Tenor: 3-7 years (bullet or amortizing)
Yield Range: 5-12% PIK/cash (guarantee-adjusted)
Minimum Viable Traction: $5M ARR or Phase 3 trials
🌍 Success Stories
« Raised $40M CGN at 8% yield while capping dilution at 12% – 60% better than Series C terms. » – Fintech Founder, London
« Exited with 3.2x return via partial conversion + warrant exercise. » – Growth Fund, Menlo Park
📞 Structure Your CGN Today
[📥 Download CGN Term Sheet Generator]
[📈 Run Dilution Scenario Analysis]
🏛 Endorsed By:
▪ NVCA Hybrid Securities Taskforce
▪ European Venture Capital Association
▪ Singapore MAS FinTech Office