Raising through a multi-tranche option to avoid a down round? How would this work?

Over beers one of my buddies mentioned he helped this consumer tech startup that is now a major silicon valley darling get through a kind of tough time and avoid a down round by doing a three tranche option of some kind. The founder only really cared about showing higher valuations at each financing and this option was structured such that each of the exercises of the "option" was essentially its own financing event. Does anyone have any idea how this might have worked? Not really familiar with options

While this is a VC topic I’d like to move the post here to PE because I know there are more eyeballs with structuring backgrounds here and this question isn’t a bread and butter pref layers structuring question