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how do convertible notes work

How Do Convertible Notes Work [Infographic]

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After discussing how to price convertible notes, we realised that there is a simpler way to explain what they are.

Convertible notes are quite simple when understood. They basically are a debt that converts into equity when a certain event (trigger event) happens. They have however some common clauses that are key to determining the equity situation of all players. Here is a visual description:

Find precise calculations for different equity scenarios in our Convertible Notes Calculator

how do convertible notes work

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1 Comment on "How Do Convertible Notes Work [Infographic]"


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Anonymous
1 year 3 months ago

Really like that description and explanation on convert notes.