Legal Documents

Convertible Note

A Convertible Note is an investment agreement between an early stage company and an investor. The Convertible Note allows the company to receive capital while not distributing shares to investors until a future date. The investment amount is a loan from the investor to the company.

When should I use it?

  • It is typically used by early stage companies who have not yet distributed shares to outside investors.

Why is it important?

  • It helps early-stage companies raise capital quickly without negotiating a clear valuation. That company valuation is not determined until a later round of funding.

Tips

  • Understand Key Terms: The terms of the Convertible Note should be discussed with your co-founders, existing investors, and advisors so that it properly reflects the terms of investment and the company’s best interests.

Legal Agreements for Growing Businesses

Legal agreements that are customized for your business. Includes e-Signatures and storage in your Founded account.

Founded Technologies Inc. is not a law firm and does not provide legal advice or legal services. We provide self-help services at your specific direction.

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