There are many ways to raise financing for your company, but one of the most popular is a convertible note.With a convertible note, the investor loans money to the startup in return for equity in the company (rather than a payout of the principal plus interest).In this article, we\u2019re going to cover the three most common terms you\u2019ll come across in a convertible note: interest rate, conversion discount, and valuation cap.What is a Convertible Note?What\u2019s the Benefit of a Convertible Note?Terms of Convertible NotesTerm 1: Interest RateTerm 2: Conversion DiscountTerm 3: Valuation CapHow Do Convertible Notes Affect Dilution?How to Be Smart with Convertible NotesBefore we can completely understand the terms in a convertible note, we need to understand what a convertible note is and how it differs from a convertible security.A convertible note is a type of convertible security. So then what\u2019s a convertible security? Convertible securities include various instruments that expect to ultimately become stocks such as SAFE\u2019s KISS-A\u2019s and convertible notes. Within the world of convertible securities, convertible notes take up a space that is known as debt equity.Essentially, convertible notes act as an IOU, but instead of paying cash, you pay in equity. Here\u2019s a more formal definition\u2026Convertible notes also carry a unique characteristic among investments. Typically, investors can only cash out during a liquidity event, like the sale of the company, but convertible notes are technically debt, and as such, if held to maturity, a note holder could demand payback.The maturity date is a deadline for a preferred round, and only during a preferred round can a convertible note convert into equity. Let\u2019s say there was a maturity date of 2 years from the date of investment. If the company hasn\u2019t had a preferred round within 2 years, the investor could demand their money back. It\u2019s\u2026<\/p>","protected":false},"excerpt":{"rendered":"
\u0647\u0646\u0627\u0643 \u0627\u0644\u0639\u062f\u064a\u062f \u0645\u0646 \u0627\u0644\u0637\u0631\u0642 \u0644\u0644\u062d\u0635\u0648\u0644 \u0639\u0644\u0649 \u062a\u0645\u0648\u064a\u0644 \u0644\u0634\u0631\u0643\u062a\u0643 \u060c \u0648\u0644\u0643\u0646 \u0645\u0646 \u0623\u0643\u062b\u0631\u0647\u0627 \u0634\u064a\u0648\u0639\u064b\u0627 \u0647\u064a \u0627\u0644\u0633\u0646\u062f\u0627\u062a \u0627\u0644\u0642\u0627\u0628\u0644\u0629 \u0644\u0644\u062a\u062d\u0648\u064a\u0644. [...]<\/span><\/p>","protected":false},"author":0,"featured_media":2796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/posts\/3228"}],"collection":[{"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/comments?post=3228"}],"version-history":[{"count":0,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/posts\/3228\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/media?parent=3228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/categories?post=3228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/tags?post=3228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}