Convertible Debt

News & Analysis as of

Why Start-Ups Use Convertible Debt Part I: Common Stock Financing and the Problem of Setting a Valuation

Most start-up companies turn to friends, family and/or high net worth individuals as the first source of capital to fund their operations. Banks will not lend to these companies since there are no real assets to collateralize...more

Convertible Notes – a Great Tool for Investment

So you have started your company! Maybe you have an investor or are looking for investors. How do you structure an investment to set everyone up for success? For many companies, convertible notes are the right answer....more

Frequently Asked Questions: Convertible Debt

I get questions all the time from clients who haven’t raised convertible debt before. If my clients frequently ask these questions, no doubt there are scores of others who have the same ones. ...more

Calculating Share Price With Outstanding Convertible Notes

Now that you have agreed on a company valuation with your investors, how do you calculate the price per share for your Series A financing? This can be especially tricky when the company has outstanding convertible notes that...more

Bill Aims To Exempt Venture Capital Company Equity Security Investments From Lenders Law

California requires persons who are engaged in the business of making loans to be licensed under the Finance Lenders Law. Cal. Fin. Code § 22000 et seq. This had been an issue for venture capital funds that extended bridge...more

Start-Up Raising Capital? Some Common Features of Preferred Shares & Why Some Select Preferred Shares over Convertible Debt

When you start a business and want to attract your first round of financing, Preferred Shares is one product that can be offered to Investors. Many Founders have asked us to explain exactly what Preferred Shares are and...more

The Changing Landscape of Seed Stage Financing, Part II: Introducing the Debt vs. Equity Dilemma

Following up on last week’s post regarding how to select your investors for early seed stage financing, we next turn to the tough and nuanced question of choosing between equity and debt, as you must be asking yourself:...more

Convertible Debt As A Financing Tool – Friend or Foe? Advantages & Disadvantages From The Perspective of the Founder Of Using...

When you start a business and want to attract your first round of financing, Convertible Debt is one product that can be offered to Investors. While some consider Convertible Debt a great alternative to selling equity,...more

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