Convertible Debt

What is Convertible Debt and how is it used in a basic way? How does it avoid the valuation question? If it defers the valuation discussion, how does it convert into equity and under what circumstances? What is the discount rate and what does that mean? How does this effect ownership percentages?

Category:

Education

Tags:

• Convertible Debt
• Equity

[timlcooley]

@timlcooley 4) how would you go about all of this if you wanted to maintain a controlling body in your company?

[timlcooley]

@timlcooley 2) Lets assume the second company evaluated the company at 1 Million and wanted 50% ownership. Based on $1 per share: you would have to give them 500,00 shares. You would still have to give the original loan company 550,000 shares. Now, you don't have that many shares to give. Also at this point you don't have any ownership of your company. How would this work? 3) what if you never need a second investor?

[timlcooley]

great video I had a few questions. 1) how do you get back to owning greater than 50% of of the company? At this rate you don't have deciding control of the company.

[pauldexteryoung]

I was able to understand everything from start to finih by just watching this video once. Great teaching skills!!! thx

[GMoNey9750]

F**king Life-saver!!... I'll remember you when I make ma first billion son

[FloridaCarClubcom]

Great crash course

[ferchopo]

Excellent video. this crash course immediately helped me negotiate a better deal.

[schstu]

I have researched through Venturehacks, entrepreneur-com, Quora and others, and your information is always the best. Your explanation of Convertible Debt is excellent.

[seanswild]

Very informative, thank you!