WED

24 FOU

ND

.A

TIO

N

TODAY

•CONVERTIBLE NOTE

•INVESTMENT TERM SHEET

WHO WE ARE

www.setupyourstartup.comfacebook.com/

SetUpYourStartUp

CONVERTIBLE NOTES

• IT IS A LOAN (SORT OF) • NO CURRENT VALUATION• SPEED, SIMPLICITY &

COST

AT A GLANCE:

CONVERTIBLE NOTE

CONVERTIBLE NOTE

“A document signed by a

borrower promising to repay a loan”

“Converts into shares”

INVESTOR’S OPTION

TAKE HIS MONEY BACK

CONVERT INTO SHARES

BASIC TERMS

DISCOUNT

INTEREST

MATURITY DATE

FINANCING AMOUNT

CONVERSION OPTIONS

CONVERSION OPTIONS

SALE OF THE COMPANY

VOLUNTARY CONVERSION

AUTOMATIC CONVERSION

NEGOTIATIONS

YOU THE INVESTOR FINAL

INTEREST 5% 10% 8%

DISCOUNT 10% 30% 20%

CAP NO YES ?

MATURITY DATE

2 YEARS 1 YEAR ?

SALE 1X 2X 2X

CAP – CASE STUDY

WITHOUT CAP WITH CAP

• Investor puts 100K• Investor estimates

valuation at 4M• 9 months after Round

at 20M valuation• Investor will have to buy

his shares with 20% discount at 20M valuation

• Investor puts 100K• Cap at 4M• Round at 20M• Investor buys his

shares based on the 4M valuation

WITHOUT CAP

FOUNDERS INVESTOR

END OF CONVERTIBLE NOTE

•BANKRUPTCY/CLOSING DOWN THE BUSINESS• COMPANY PAYS BACK AMOUNT WITH INTEREST• IF NO ASSETS INVESTOR GETS NOTHING

•FINANCING ROUND: INVESTOR SHARES

•EXIT: INVESTOR MONEY

WHAT DOCUMENTS YOU ARE SIGNING

CONVERTIBLE NOTE

TERM SHEET

PURCHASE AGREEMENT

THANK YOU

Let’s Connect

christina@dimitrioulaw.com

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