What form does a startup investment take?

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A startup investment may be in the form of a convertible note (debt) or equity (sometimes called a priced round).  A convertible note is effectively a loan to the startup that may pay annual interest (typically 6-8%) and/or provide a discount to buy in to a future round of equity (usually 10-20%).  Equity, in most circumstances, provides a percentage ownership in the company in much the same way as investing in a public stock.

acr30 Expert Answered on September 7, 2015.
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