Seedrs, a European platform where people can invest in seed-stage companies in exchange for equity, has launched its first ‘convertible note’ backing campaign today.
Essentially, a convertible investment round means that investors get a discount on future shares without requiring the company to get a formal valuation. It’s like an extra little reward for believing in a company from the start. And for the companies involved, convertibles often act as bridging finance between rounds.
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“Convertibles are very popular among startups in Silicon Valley as a way to raise money now, while deferring the need to place a value on the company until some time in the future. This can be particularly useful when a startup is looking to raise large venture capital funding in the near future, but doesn’t want a valuation placed on their company now which may affect those negotiations,” a spokesperson said.
Future Ad Labs, which is looking to raise £400,000, will be the first company to run a convertible campaign but it’s now open to all comers.
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