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In the context of a convertible bond, an investor lends a start-up a certain amount of money and in return acquires the right to convert this amount of money into shares in the next financing round on preferential terms.
Convertible bonds are now widely used internationally and make a "continuous fundraising" model possible. For start-ups, convertible bonds are an attractive and practical financing option, especially at the beginning. Not all investors need to be brought on board at the same time, and the terms of a future financing round will be first negotiated at a later point.
When do I need a convertible loan?
If you need additional funding for growth and you (i) do not yet wish to issue additional shares or (ii) do not have sufficient time, (iii) adequate funds or (iv) a satisfactory assessment to perform a financing round.
For whom is a convertible loan best suited?
The package is aimed at ambitious start-ups that want to raise capital for further growth. The reasons to opt for a convertible bond form of financing are:
- The evaluation discussion should be postponed, as a better evaluation might be possible at a later stage.
- There is not enough time to find investors and negotiate a complete financing round.
- At this stage, only a small amount should be funded.
How long does it take to prepare the convertible loan?
With our complete package, a convertible bond can be drafted in five process steps within one working day:
- Convertible bond calculator: With our convertible bond calculator, entrepreneurs can run through various scenarios regarding possible convertible bonds.
- Important terms & conditions: One of the most important things to do before drawing up a convertible bond is to understand the typical terms and conditions.
- Strategy: Together, we will work out the strategy for the financing and define the desired specific terms and conditions.
- Negotiation: The total package includes up to three hours of negotiation support with our experienced legal advisors.
Conclusion: After all conditions have been negotiated and the necessary documents have been drawn up, we clarify all open questions and conclude the project.
What do I get?
Consultation on the strategy and structuring of the convertible bond: We will take a look at the company and jointly define the objective, explain all important aspects and answer legal questions about the convertible bond. With our convertible bond calculator, we can easily run through various scenarios.
Legal documents tailored to the company: We will design the legal documents based on our proven and tested templates and the structure we defined in the first step. In doing so, we engage in a continuous, close dialogue with the company in order to take all requirements into account.
Practical guide to convertible bonds: The package includes a comprehensible guide that summarises all the important points again in a clear and understandable manner. This can also help with investor discussions. If investors have any questions about the convertible bond, we offer an online session in which they can participate.
Negotiation support: We support you in negotiations with investors. Up to two hours of support are included in the package.
Indicative price CHF 1'615.- incl. VAT.
You will receive an individual offer for the creation of the convertible loan. Do you have special wishes or circumstances that should be taken into account? Mention them in the free text in the inquiry form.
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The appropriate legal form depends greatly on the business model. If there is a financial risk, we always recommend establishing the company in the form of a legal entity. In the initial stages, a limited liability company (LLC) is often sufficient. However, as soon as one starts looking for investors, a conversion to a public limited company (PLC) becomes necessary in most cases.
We always recommend a founder’s contract if you are funding the project with at least one other person. In this way, many conflicts can be avoided, and the focus can concentrate on what is essential for the company.
IP is one of the most important potential competitive advantages, especially for fast-growing companies. Depending on the business model, the IP can be, for example, an invention, software, design, a trademark or even certain data. Depending on the type of IP, these can be protected differently, be it by a patent, trademark protection, copyright or simply by non-disclosure agreements.
In addition to employment contracts for employees, a shareholder agreement between the founders is very important as well as a solid standard contract for the company's own services.
In addition to the mandatory legal provisions regarding social insurance, it is particularly important that the IP created by employees actually belongs to the company and that one has a legally secure employment contract - legal disputes with employees are among the most frequent court cases.