Convertible Loans for Startups
Get convertible loans prepared by experienced lawyers starting from CHF 1,615
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In the context of a convertible loan, an investor lends a specific amount of money to a startup and, in return, acquires the right to convert this amount into shares at discounted terms in the next financing round.
Convertible loans are widely used internationally today and enable a "continuous fundraising" model. For startups, convertible loans are particularly attractive and practical at the beginning. Not all investors need to be brought on board simultaneously, and the terms of a future financing round are negotiated later.
About the Package
Convertible loans are a suitable option when additional financial resources are needed for growth, but (i) no further shares are to be issued, or (ii) there is insufficient time, (iii) resources, or (iv) a sufficient valuation to conduct a financing round.
Target Audience
This package is aimed at ambitious startups seeking capital for further growth. Reasons for choosing the form of financing for a convertible loan include:
- The valuation discussion should be postponed, as a better valuation may be possible at a later date.
- There is a lack of time to find investors and negotiate a complete financing round.
- Only a small amount of financing is required at the present time.
Process and Duration
With our complete package, a convertible loan can be set up in five process steps within one working day:
- Convertible Loan Calculator: Entrepreneurs can use our convertible loan calculator to explore various scenarios for potential convertible loans.
- Key Terms and Conditions: One of the most important prerequisites before setting up a convertible loan is understanding the typical terms and conditions.
- Strategy: Together, we will develop the strategy for the financing and define the desired specific terms and conditions.
- Negotiation: The overall package includes up to three hours of negotiation support with our experienced legal advisors.
- Closure: After all terms have been negotiated and the necessary documents have been created, we will address any remaining questions and close the project.
Service
- Consultation on the strategy and structuring of the convertible loan: We will assess the company, define the goal of the convertible loan together, explain all the important aspects of the convertible loan, and answer legal questions about the convertible loan. Various scenarios can be easily played out using our convertible loan calculator.
- Tailored legal documents for the company: Based on our proven and tested templates and the structure defined in the first step, we will draft the legal documents. We will maintain continuous, close dialogue with the company to address all requirements.
- Practical guide to convertible loans: The package includes an easily understandable guide that summarizes all the important points clearly and concisely. This can also help with investor discussions. If investors have any questions about the convertible loan, we offer an online session they can attend.
- Negotiation support: We assist you in negotiating with investors. Up to two hours of support are included in the package.
Price
Estimated price CHF 1,615 incl. VAT.
You will receive an individual offer for the creation of the convertible loan. Do you have any special requests or circumstances that should be considered? Mention them in the free text in the request form.
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What do I need to know about convertible loans?
The right legal form depends heavily on the business model. If there is a financial risk, we always recommend establishing the company as a legal entity. Often, a GmbH (limited liability company) is sufficient at the beginning. However, when seeking investors, conversion to an AG (public limited company) is usually necessary in most cases.
We recommend having one whenever you embark on the venture with at least one other person. This helps avoid many conflicts and allows you to focus on what is essential for the company.
IP is one of the most important potential competitive advantages, especially for rapidly growing companies. Depending on the business model, IP can be an invention, software, design, a trademark, or even specific data. Depending on the type of IP, there are different ways to protect it, whether through patents, trademark protection, copyright, or simply through confidentiality.
In addition to employment contracts for employees, a shareholders' agreement between the founders and a solid standard contract for your own services are essential.
In addition to the legally mandatory requirements for social security, it is essential that the IP created by employees actually belongs to the company and that you have a legally secure employment contract – legal disputes with employees are among the most common court cases.