In your free time, while not grinding away at your corporate day job, you’ve developed an early-stage version of an application that allows users to chase small digital emojis around town while staring at a smart phone. You’re confident it’s the next big thing, and the opportunities to monetize are endless. The problem: you’re not independently wealthy and the Powerball odds are awful.
Often, the first place founders look for cash is from friends, family and their professional network. Incubators, accelerators and “angel” investors may also be sources of initial seed funding. There are many considerations when navigating early-stage seed investments from valuation concerns to guaranteed returns to management and voting rights. There is a useful alternative to standard equity in early stage investments: convertible debt. Find out about its convertible debt’s key features, terms, and hang-ups in this post on our Food & Ag Law Insights blog.