Convertible debt is particularly useful in the following scenarios:
Early-Stage Funding: Startups often use convertible debt to bridge the gap between initial seed funding and a larger Series A round. Uncertain Valuations: Companies with uncertain or rapidly changing valuations may prefer convertible debt to delay the pricing of an equity round. Strategic Investments: Convertible debt can be a tool for strategic investors who want to invest in a company without immediately diluting their equity stakes.