Continuing in Phase One of a four-part Funding Series:

Phase One - Structuring a Fundraise

• Part 1 - Startup Bootstrapping

• Part 2 - Debt as Startup Capital

• Part 3 - Equity Funding for Startups

• Part 4 - Convertible Debt ( ←YOU ARE HERE 😀)

Phase Two - Investor Selection

Phase Three - The Pitch

Phase Four - Investor Outreach

Let's dive in!

What is convertible debt?

Convertible Debt (or a “Convertible Note”) is often used as a method for making an equity financing investment. Unlike regular equity financing investments, though, Convertible Debt includes terms like an Interest Rate, Maturity Date, and Valuation Cap - which we’ll explain here as to how they play a role in a Convertible note.

Convertible Debt is essentially a mash-up of debt financing and eq...