Convertible loans: Flexible financing instrument for start-ups

February 15, 2024

Convertible loans are a form of financing that offers investors the opportunity to convert the borrowed capital into equity shares in the company under fixed conditions, typically during a future financing round. This instrument offers startups a fast and flexible way to raise capital without having to immediately determine a company valuation, which is often challenging in early stages. Convertible loans are particularly attractive for young companies and investors as they minimise risk while offering the potential to participate in the future value growth of the company.