More info on a Convertible Loan please.

[SunshineValley]

I've been offered funding by means of a convertible loan and need to educate myself more about the pros and cons for an early stage startup.

Obviously I'm googling authority sites and the majority of the information indicates that it's a positive way of achieving funding for both sides due to the speed and 'simplicity' in which it's arranged.

Is it possible to set the option at a predetermined share value or is the value determined upon execution?

My main concern is how will it affect my current 75% shareholding in potentially future funding rounds?

Thanks

 

[Mark T Jones]

I'd say the answer will depend very much on the terms and the basis of conversion

 

[Clinton]

I wrote a piece for Divestopedia on convertible bonds a few years ago that may be of interest to you. It covers the subject in some depth.

With respect questions you have about how this will play out in your specific circumstances, there is no option but to go shell out for professional advice*.

I don't understand why people don't do that in the first place especially on significant matters such as these!

Tip for you if you're a startup: Some of the most important skills in growing a business are learning to recognise when you need professional help, finding the right advice and being willing to pay well rather than trying to do everything on the cheap or through Google.

*I don't advise privately on this topic, sorry, so don't contact me.