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What is convertible equity (or a convertible security)?

Startup Company Lawyer

Quick answer: convertible equity (or a convertible security) is convertible debt without the repayment feature at maturity or interest. Over the past few years, convertible debt has emerged as a quick and inexpensive method for startup companies to raise money from angel investors and early stage venture funds.

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The Legal Side of Entrepreneurship

YoungUpstarts

They also need to decide whether to structure terms as an equity deal or a convertible security deal. “If you’re going to raise $1 million, my advice is to propose a convertible security, because you can get it done quickly and less expensively,” said Schmitz. Convertible Securities.

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A primer on convertible notes, convertible securities, and equity

Hippoland

This is another deterrent to investors investing on a convertible note. Convertible Securities So as a happy medium, both YC and 500 Startups created Convertible Securities. Convertible securities have properties that are akin to both equity and convertible notes.

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Should you raise on convertible notes or do an equity round?

Hippoland

Since this is a hefty topic that we could discuss for days, in this post I’ll aim to cover just the pros and cons of each from a founder’s perspective and will NOT cover: What is a convertible note, equity, or convertible security ? In general, I’m a big fan of convertible notes or convertible securities for seed stage founders.

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More Tech Startups are LLCs

Austin Startup

Many angel investors, and also strategic investors, are comfortable investing in LLCs, particularly under a convertible security structure that doesn’t immediately result in equity holdings.

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$100,000 Autonomous Drones & Mobility Investment Challenge

Austin Startup

If you win, you will receive a $100,000 investment from Capital Factory on a convertible security (see application for more details). 23,000 square feet of collaboration space with the Army Applications Lab, AFWERX, Defense Innovation Unit, the National Security Innovation Network (NSIN?

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What early stage fundraising in 2018 looks like?

Hippoland

It will be hard to raise a pre-seed round through traditional methods If you are raising money through traditional methods (such as with angels / micro VCs / VCs) via a convertible note or convertible security or equity deal, it will be a lot harder to raise pre-seed money in 2018. Cons: Slow.