Are you ready to use a Convertible Note?

Are you thinking about raising funds using a convertible note?

If that’s the case, you should have a solid grasp of the financial instrument’s implications, and of the process, so you can negotiate and strike the best possible deal with your potential investors.

So what are the first steps to issue a convertible note? And how and when does one go about converting this investment into equity?

All in all - are you really ready to get started on convertible notes?

Take this quiz to find out!

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You’re thinking of raising equity from external investors. A convertible note will be an appropriate financial instrument if you are…

A pre-seed and seed stage startup founder with not much more than yourself and your idea, and very few data points and insights to value your company at this stage.

An entrepreneur with an early stage company fundraising for a Series A, B or C round, and looking to issue shares of common stock to your investors.

An entrepreneur looking for a loan that you can repay back over a defined period of time at little interest.

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Idea

Are you ready to use a Convertible Note?

You’re thinking of raising equity from external investors. A convertible note will be an appropriate financial instrument if you are…

You’re now ready to issue a convertible note. The first step is to:

Once you’ve issued your convertible note, what are major conversion events (resulting in equity distribution among investors) that you should keep in mind?

Your next qualified financing is:

You raise a Series A round of funding $1M at a valuation of $10M. You own 1M company shares and had previously issued a $500K convertible note (30% discount rate upon conversion, no interest rate or cap value.) How many new shares will you need to issue the founder, the investor and note holder?

Now’s the time for you to convert your convertible note. What method offers the most favourable investment terms to founders? (meaning founders don’t get diluted as much as in the other methods.)

Create Your Account Now

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Idea

Are you ready to use a Convertible Note?

You’re thinking of raising equity from external investors. A convertible note will be an appropriate financial instrument if you are…

You’re now ready to issue a convertible note. The first step is to:

Once you’ve issued your convertible note, what are major conversion events (resulting in equity distribution among investors) that you should keep in mind?

Your next qualified financing is:

You raise a Series A round of funding $1M at a valuation of $10M. You own 1M company shares and had previously issued a $500K convertible note (30% discount rate upon conversion, no interest rate or cap value.) How many new shares will you need to issue the founder, the investor and note holder?

Now’s the time for you to convert your convertible note. What method offers the most favourable investment terms to founders? (meaning founders don’t get diluted as much as in the other methods.)

Create Your Account Now

You might also like

Course: Learn What It Takes To Raise Funds For Your Startup

Quiz: How well do you know how to raise funds?

Here are your alternatives if you can't afford a CFO

Financial Ratios: Benchmark your Company's Performance

Understanding your company's core Financial Statements

Understanding the Operations and Roles within the Finance Department

How Do You Manage Financial Risk?

Why does Financial Management matter?

Mastering Fundraising: Steps to Success!

Why Do Aspiring Entrepreneurs Need to Approach Funding the Right Way?

Speak The Language of Fundraising

The Funding Instruments

Here Are The Different Ways to Fund your Startup

Convertible Notes: Key Terms & Definitions

Fundraising & Funding Sources In The UAE: External Financing Alternatives

Fundraising & Funding Sources In The UAE: Bank financing & Government-funded programs

Fundraising & Funding Sources In The UAE: Angel Investors & VC Funding

What are Convertible Notes and what value can it bring to your business?

Pre-Money vs. Post-Money Valuations: What is the difference?

The most unusual source of startup funding: Crowdfunding

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