A Convertible Note is a simple promissory note, usually bearing interest and payable at some future date. The conversion into equity is usually at a valuation that is consistent with the valuation agreed to with investors in an investment round that occurs at a later time.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés.
For your convenience, the complete English version of this form is attached below the Spanish version.
Startups should think about their funding needs, potential growth, and how much control they want to give up. It’s all about weighing the pros and cons, like choosing between a solid meal or a quick snack!
While there’s no one-size-fits-all, Convertible Notes usually have terms ranging from 6 months to 3 years. It’s kind of like picking a timeline for a big project – you want to keep it reasonable!
The interest on a Convertible Note typically accrues over time. When the note converts into equity, that interest can also convert, giving investors a bit of a bonus down the road!
Absolutely. Investors are taking a risk since they're betting on the startup's future success. If the startup fails, they might end up with nothing, making it a bit of a gamble.
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