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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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Raising Startup Capital Through Convertible Debt Financing

Business Plan Blog

In addition to convertible debt, other methods can be used to pay back FFF such as: 1) Fixed repayment schedules tied to company’s future cash flow(s). 3) Giving non-voting stock. It gives in depth examples & templates explaining documents like Term Sheet, Cap Table, Convertible Securities plus the importance of 83(b) filing.

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