In our work with startup founders, we’ve come to discover that convertible debt is a confusing subject for many. It’s a complicated and nuanced topic, but here are the three things you need to know up front:

Trust us, there is far more to convertible debt than knowing these three things, and we’ll cover them in subsequent posts, but let’s first arm you with the basics.

Delay Your Valuation

For many founders, the most meaningful characteristic of convertible debt is around valuation; specifically, the fact that you don’t need one.

If you are trying to raise $50,000 in seed stage capital, chances are you don’t have a lot of traction, and that can make valuation painful. Imagine that the investor values your idea in its current state at $...