Convertible Note Terms: How Convertible Notes Work

An explanation of how a convertible note works and the typical convertible note terms you’ll see in a convertible note term sheet. Topics covered include:

Convertible note maturity date

Convertible note discount

Convertible note cap

Convertible note vs equity

We also discuss some of the advantages and disadvantages of using the convertible note as an fundraising vehicle.

In later videos in this series, we’ll discuss other common options: the Simple Agreement for Equity (SAFE) and an equity investment using the Seed Series documents.

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