Venture Deals · glossary
A loan meant to turn into shares at the next round, usually at a discount. If no round comes, it must be repaid on its maturity date. Solaris issued €800,000 of notes at 8% simple interest under one note instrument. Appendix 2 · Chapter 4
Explained in Chapter 4, Convertible Loan Notes, of Venture Deals.
A convertible loan note is a loan to a company that is meant to become shares. The investor lends money now, and at the next funding round the loan turns into shares at a discount to that round's price. If the round never comes, the company must repay the loan on a fixed date, with interest. Investors use notes when nobody can yet agree what the company is worth.Read Chapter 4, Convertible Loan Notes →
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