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.
Yes, most Convertible Notes come with an interest rate, which means you earn a bit while waiting for your investment to convert. It’s like getting a cherry on top of your sundae!
If the company is sold before the note converts, you typically get repaid or you might receive shares based on the terms of the agreement. It’s like cashing out before the final curtain call.
Absolutely! Like any deal, terms can be negotiated. It’s always smart to discuss and tweak things until both sides are on the same page.
The main risk is that if the company fails, your investment may be lost. It’s a bit like putting your eggs in one basket—the basket may break!
Startups often use these agreements because they need quick funding without the hassle of valuing the company right away. It's like taking a shortcut to get resources without the long route.
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