• August 2019
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Convertible Note Lawyers

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FUNDRAISING

Getting funded.

A Convertible Note allows you to raise money without hassle from investors using valuation caps and discounts.
Make sure it's done right 

Confirm your legal compliance
Have an equity attorney to turn to 

Avg price range

Costs largely depend on the complexity of the project, location, and other details. Speak with our experienced project managers to get an exact price based on your unique project requirements. 
 
*Estimates shown
  • CONVERTIBLE NOTE

$400 - $1,300 avg.

LawTrades
Traditional Large Firm

Convertible notes and funding

A convertible note is a debt instrument that companies utilize to raise initial or “seed” funding. It is a popular way for investors to invest in a business that is in its formative stages. A convertible note is structured similar to a loan, the only difference being that it converts into equity after the business becomes more established either by acquiring more funding or reaching a particular milestone.

Convertible notes were pioneered to allow founders to get a quick loan from private investors in exchange for promising to repay those investors with stock at a later time when the price could be determined - normally, after a Series A funding round. Convertible notes have been touted as a “best of both worlds” deal; both a startup's perspective as well as from the investor’s perspective. They not only protect investors but also the businesses as well by allowing them to be valued more than their present value. One thing is for certain though; convertible notes are complex and should be drafted with the guidance of an experienced convertible note financing lawyer. 

The benefits

Confirm best form of funding 

There are other options for companies - such as equity financing - and a convertible note lawyer can assess if a convertible note or equity raise is right for your business better.

Having a convertible note lawyer to turn to 

With things like fundraising, it’s convenient and efficient to use the same convertible note lawyer throughout. It’s smart to introduce a convertible note lawyer to the process at an early stage such as the issuance of a convertible note and we’re sure you like the expert lawyers for business startups at LawTrades. 

Learn about useful terms

An experienced lawyer for business startups has assisted with this process already and can suggest terms that have worked in the past. 

How it works

Evaluate.

Our legal team evaluates your business needs and designs a custom solution for your legal strategy.

Deploy.

We deploy the right legal talent to the right projects– both aligned with your company's culture and priorities.

Integrate.

We onboard your lawyers and they start contributing, supported by our senior legal staff.

Iterate.

Expand and contract work based on the fluctuating needs of your business.

How it works

Evaluate.

Our legal team evaluates your business needs and designs a custom solution for your legal strategy.

Deploy.

We deploy the right legal talent to the right projects– both aligned with your company's culture and priorities.

Integrate.

We onboard your lawyers and they start contributing, supported by our senior legal staff.

Iterate.

Expand and contract work based on the fluctuating needs of your business.

Reviews

Joel G.

⭐⭐⭐⭐⭐
Everything was very streamlined; I tried contacting a "regular" law firm before setting up a LawTrades account, and they didn't even respond to me (even months later). LawTrades was so fast that I wasn't even prepared for it. Good stuff.

Stuart G.

⭐⭐⭐⭐⭐
Excellent, straightforward service which was simple to use particularly when under a tight deadline.

Lori L.

⭐⭐⭐⭐⭐
I am so thankful to have located Law Trades. As an indie publisher, I have a tight budget and help with legal documents can "break the bank". Law Trades offered a reasonable price - suitable for a small business like mine. The service was extremely professional and I was able to receive the legal document I needed in less than 1 week.

What people
are saying

(100+ Positive Reviews)

⭐⭐⭐⭐⭐

Reviews

Joey C.

⭐⭐⭐⭐⭐
So far has been an excellent experience. My LawTrades attorney is excellent at what he does, has fair pricing, and is as excited to work with our company as we are to build it. LawTrades also has excellent customer support, and I've enjoyed using your interface as well to track invoices. The only thing I would want is the ability to delete projects, and to use your website on my tablet. Other than that, great work. Keep it up! I've already mentioned you to other founders and colleagues!

Justin P.

⭐⭐⭐⭐⭐
I had an excellent experience with LawTrades. From the initial enquiry they located a lawyer (Sylvain) who was ideal for my needs. Sylvain was very friendly, efficient and provided a great service at a great price. I would not hesitate to use LawTrades or Sylvain again. The administration and process from start to finish was made as easy as possible by the LawTrades team.

Michael A.

⭐⭐⭐⭐⭐
Have been working with them since back in 2015. They're building an amazing platform that's really going to disrupt how the legal practice has been looking at for quite a while. Big fan of what they are in the process of building, and the product itself is great too. Recommend this to anyone who's looking for a lawyer, but might be confused about where to start. LawTrades makes it super easy.

Frequently asked
questions

What’s the difference between a convertible note and an ordinary loan?
What distinguishes a convertible debt note from an ordinary loan are two key characteristics: (1) the discount, and (2) valuation cap. The discount is a feature that rewards early investors for taking larger risks than later investors. It does this by offering them the right to obtain shares at a cheaper price than that paid by Series A investors, once that round closes. The conversion cap similarly rewards early investors for their disproportionate risk, but in a different way than the discount. The cap sets the maximum value of a company when Series A closes, again giving an advantage to earlier investors.
Who are the types of investors interested in convertible notes?
Common investors include friends and family, angel investors, venture capitalists (VCs), crowdfunding websites, peer-to-peer lenders, and institutional lenders.
What happens to convertible notes if a company is acquired before the notes mature or are converted in an equity financing round?
The most common scenarios are: (1) the note gets repaid at a premium (principal + interest + premium); (2) the note gets repaid as an ordinary loan (principal + interest); or (3) the note converts according to its terms. A convertible note lawyer can provide keen insight regarding which structure is most advantageous for your particular situation.
What are some material terms and parameters to include in a convertible note?
It’s common for the following terms to be included in a convertible note: 1) class of security (what the note will convert into); 2) conversion triggers; 3) the interest rate on the note; 4) whether the note will be secured; 5) warrants (gives the holder the right to purchase a company’s stock in the future at a per share price that is typically set at the time the warrant is issued); 6) valuation cap; 7) discount rate; and 8) the next equity financing.
What is the Qualified Round?
A Qualified Round is an equity deal that triggers conversion of the convertible note. There is usually a minimum amount of proceeds that need to be raised in the next round of financing in order for the investor's note to be eligible for conversion.
What does a “Most Favored Nation” clause in a convertible note mean?
A Qualified Round is an equity deal that triggers conversion of the convertible note. There is usually a minimum amount of proceeds that need to be raised in the next round of financing in order for the investor's note to be eligible for conversion.