Being an entrepreneur might seem like an easy way to achieve success. But often, it’s a rocky road you must navigate and steer your business in the right direction. There are many things that you will come across that require difficult decisions and cause stress. If you have a new startup on your hands and are looking for funding, you may ask, what is my company’s value? The answer to this question has a huge effect on the capital that you will be able to get for the business. Sadly, valuation is a very complicated thing. Due to this, a lot of startups tend to use convertible notes for their initial seed capital when engaging with investors.

1. Convertible Notes
A convertible note is a kind of funding instrument that
converts into equity after a period of time. In short, it is
convertible security. But what is convertible security?
Well, these include many funding instruments expected
to turn into stocks. These instruments include SAFEs,
KISS and convertible notes

2. With the help of a convertible note,
you and your investors are allowed
to find out the valuation of the
company after some time later
when the company has some
relevant data like customers, sales,
growth numbers, and so on. The
valuation of a company is not based
purely on estimation, and that is
why convertible notes are used
Why Use Convertible
Notes?

3. Terms Of Convertible
Notes
Maturity Date
Interest Rate
Conversion
Discount
Valuation Cap