{"id":907,"date":"2025-05-13T14:36:41","date_gmt":"2025-05-13T14:36:41","guid":{"rendered":"https:\/\/www.tunggalbarabanua.com\/?page_id=907"},"modified":"2025-05-13T14:36:41","modified_gmt":"2025-05-13T14:36:41","slug":"convertible-note","status":"publish","type":"page","link":"https:\/\/www.tunggalbarabanua.com\/?page_id=907","title":{"rendered":"Convertible Note"},"content":{"rendered":"<p><!--StartFragment --><\/p>\n<p>A <strong>convertible note<\/strong> is a short-term debt instrument that can be converted into equity in a company. It is commonly used by startups during early-stage funding rounds because it allows them to raise capital without immediately determining a valuation.<\/p>\n<h3><strong>Key Features of Convertible Notes<\/strong><\/h3>\n<ul>\n<li><strong>Debt with Conversion Option<\/strong> \u2013 Investors lend money to a startup, and instead of receiving repayment, they can convert the debt into shares.<\/li>\n<li><strong>Valuation Flexibility<\/strong> \u2013 The startup does not need to set a valuation at the time of investment.<\/li>\n<li><strong>Discount Rate &amp; Valuation Cap<\/strong> \u2013 Investors may receive a discount or a cap on the valuation when converting their debt into equity.<\/li>\n<li><strong>Interest Accrual<\/strong> \u2013 Convertible notes often accrue interest, which is added to the principal amount upon conversion.<\/li>\n<\/ul>\n<h3><strong>How It Works<\/strong><\/h3>\n<ol>\n<li><strong>Investor provides funding<\/strong> to the startup in exchange for a convertible note.<\/li>\n<li><strong>The note accrues interest<\/strong> and has a maturity date (typically 18-24 months).<\/li>\n<li><strong>Conversion into equity<\/strong> happens when a triggering event occurs, such as a future funding round or an acquisition.<\/li>\n<li><strong>Investors may receive benefits<\/strong> like a discount rate or valuation cap when converting their debt into shares.<\/li>\n<\/ol>\n<p>Would you like to explore how convertible notes compare to other startup funding options?\u00a0<!--EndFragment --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A convertible note is a short-term debt instrument that can be converted into equity in a company. It is commonly used by startups during early-stage funding rounds because it allows them to raise capital without immediately determining a valuation. Key Features of Convertible Notes Debt with Conversion Option \u2013 Investors [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":[],"_links":{"self":[{"href":"https:\/\/www.tunggalbarabanua.com\/index.php?rest_route=\/wp\/v2\/pages\/907"}],"collection":[{"href":"https:\/\/www.tunggalbarabanua.com\/index.php?rest_route=\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.tunggalbarabanua.com\/index.php?rest_route=\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.tunggalbarabanua.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tunggalbarabanua.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=907"}],"version-history":[{"count":1,"href":"https:\/\/www.tunggalbarabanua.com\/index.php?rest_route=\/wp\/v2\/pages\/907\/revisions"}],"predecessor-version":[{"id":908,"href":"https:\/\/www.tunggalbarabanua.com\/index.php?rest_route=\/wp\/v2\/pages\/907\/revisions\/908"}],"wp:attachment":[{"href":"https:\/\/www.tunggalbarabanua.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=907"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}