The Benefits of Convertible Notes

2min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

The convertible note is debt which means if there's any dissolution any liquidation any sale the company debt is number one in line prior to any equity. It also has a maturity date that safe do not have this is like the the forcing function from an investor perspective right? The safe can just hang out there for as long and they want and they do. I'm sure they start you personally know that.

Todays show:

Wilson Sonsini Partner Becki DeGraw joins Jason on the latest edition of Startup Legal Basics! In this episode, they break down legal standards in the startup ecosystem(2:19), SAFE agreements and convertible notes(5:41), conflicts faced by founders and investors(20:58), and much more!

Time Stamps:

(00:00) Wilson Sonsini Partner Becki DeGraw joins Jason

(2:19) Breaking the box or sticking to widely accepted frameworks

(3:47) General trends and the adoption of safe agreements

(5:41) Differences between SAFE agreements and convertible notes

(10:34) Companies that raised high valuations during a hot market and need to raise funds again

(15:43) The impact of down rounds and pay-to-play provisions on investors, founders, and employees

(20:58) Conflicts faced by founders, existing investors, and new investors

(27:58) Surviving down markets

Check Out Wilson Sonsini: ⁠https://www.wsgr.com/en/⁠

⁠Read LAUNCH Fund 4 Deal Memo⁠: ⁠https://www.launch.co/four⁠

⁠Apply for Funding⁠: ⁠https://www.launch.co/apply⁠