In detail, this Founder’s Pocket Guide helps startup founders learn:
• What convertible debt is and how it can be an important fundraising structure.
• Key terms and definitions associated with convertible debt, such as conversion triggers, valuation caps, and conversion discounts.
• Key advantages and disadvantages of using convertible debt as a funding structure.
• How investors view the convertible debt, and what their expectations are for early-stage investment deals.
• Simple math for calculating the impact of conversion discount rates and resulting equity ownership on conversion.
• Example convertible debt deals illustrating how convertible debt benefits both founders and investors alike.