SEDA – Stand by equity line of credit
Standby Equity Distribution Agreement (SEDA)
A Standby Equity Distribution Agreement (SEDA) is an agreement between a company and a buyer of its shares. It's a way for the company to raise money by selling new shares without making a public offering. The buyer agrees to buy a certain number of shares over a certain period of time, usually at a discount to the current market price. The company has control over when it sells the shares and can choose not to sell any if it doesn't need the money. SEDA increases the number of a company's shares and total equity, but it also dilutes the equity of existing shareholders.
BMI can be your first stop before going to market with a SEDA offering, and we can provide term sheets from investors in a reasonable time