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I won’t rehash all of the customary convertible note financing deal terms and points of negotiation here. (For Like any promissory note, it bears interest (usually at a nominal rate) and has a maturity date on which the loan must be repaid if it hasn’t been converted to stock (typically around 18 months).
Raising SeedCapital. Most startup founders do not have enough capital to launch their companies and need to raise money at some point. Among the most common methods of funding used by startups when raising seedcapital is “Convertible Debt Financing.” Bridge notes/loans are an example of convertible debt.
This may seem like a no-brainer now that you understand the basic structure of a convertible debt financing. At least one well-known Silicon Valley venture accelerator is using a document referred to as a “ convertiblesecurity ” rather than “convertible promissory note.” These deal terms are simple but significant.
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