All terms
Investment & FinanceStartup Lifecycle
Milestone-Based Tranche
Investment paid in installments triggered by predefined milestones.
Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026
Definition
A tranched financing releases capital in stages, with later tranches conditioned on the company achieving specific clinical, regulatory, or commercial milestones - for example, IDE approval, first-patient-in, 510(k) clearance, or first commercial sale.What this means in practice
Common in MedTech where binary risk events (FDA decisions, pivotal trial readouts) make staged capital deployment attractive to investors. Founders should negotiate milestones that are objectively measurable and within the company's control. Common pitfalls
- •Accepting milestones that depend on third parties (FDA timelines, payer decisions) without clear cure provisions.
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409A Valuation
An independent fair-market-value appraisal of common stock used to set tax-compliant strike prices for employee stock options.
Investment & Finance
Anti-Dilution Protection
Adjustment that protects investors if the company raises a future round at a lower price.
Investment & Finance
Bridge Round
Interim financing between priced rounds, usually convertible.
Investment & Finance
Burn Rate
Rate at which a company spends cash, typically expressed monthly.
Primary references
3 sourcesLink health: 3 verified· last checked 2026-06-20
SVB·2NVCA·1
- 1
Silicon Valley Bank: tranched financingsVerifiedSVBsvb.com
- 2
NVCA Model DocumentsVerifiedNVCAnvca.org
- 3
Silicon Valley Bank - Healthcare ReportsVerifiedSVBsvb.com
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