Convertible loan notes allow startups to raise capital quickly while deferring valuation to a future equity round. They are faster and cheaper to put in place than a full equity round, making them popular at early stages. However, the terms need careful attention. Founders must avoid agreeing to terms that discourage future investors or that give away excessive equity on conversion.
We advise on the terms of convertible loan notes, negotiate on behalf of founders, and make sure the documentation is properly structured to protect both the company and its investors.