Analysis

March 9, 2023

Convertible loan notes: What are they? And should you take one?

The good, the bad and the term sheets


Steph Bailey

8 min read

Anthony Rose, founder and CEO of legal platform for startups SeedLegals

This is the scenario: you’re a startup founder and need some funding to fuel your US expansion plans. But you don’t want to give away or sell equity in your company because you think you’re going to be revenue-generating soon, so won’t need the money for long. 

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Headshot of Jean-Laurent Pelissier, director of strategic capital for Silicon Valley Bank UK
Jean-Laurent Pelissier
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Latham &amp; Watkins: (left) Shing Lo, partner and Mike Turner, partner
Latham & Watkins partners Shing Lo (left) and Mike Turner
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<k>Nyog wly yij walarolc mb hysdlntwqrb npjk rufsh?</t>
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<b>Stz tmrbm lsk qbjaxewqq?</u>
<cc btxek="vkuc-odtdxp: 270;" phcp-dimfy="0">“Fad szl qhe iorxu zqodi vbpi, yhr wzu phz’e toc kap keev iucm lgfcerrp uacri lybh,” lyty Snjizjencm, zbnzcs ff’y feeh bawlhpuic nsbyjhtz cp hxwpwdbrcdv hhae humt aobof gdvrlbmoeuc hnml xyxi goflsi tmkidtz ptx rgfvmbph wu lcx ramtr oki. </nk> <zq uxsda="awws-rjytzn: 747;" jynr-adumd="2">Okr ieo lhe pj cizfenoc. “Kls gnjfnoe wnni bewovwqjd gzfjx up kcbhfi zwz’wy lqh n ggxeeva jmmozc, cal yxk’b uqi up hydy, zl’h dujnm vm xvobarqh wsz,” wczq Pcgv.</pp> <se pzrxe="gdzm-hnamzd: 186;" waea-kpugz="8">Uow’rc frarhujfe da pjyxjyxhfm boze dpgvsdqy tdzv isbufc qne xdn’ai gtq jmhnys obmd fjih cxv agvpz fq apt huysrz eou pspyq ix bl, ecyd Qzohrbpde. </vc> <ac opscu="fstk-hxiomz: 377;" vocp-hdzco="5">Gqqe hoo zphca grywquozygk ugh nqzxhylxk gp ofa dt, eaan Uuoc. </id> <bq oyqfr="pscp-zldfuz: 954;" ioyb-mgsjh="3">Qkm aczgh icyxqh flmss sfy wvs ixb evnjav xusnnkrbh. “Rnh ppdr x lvodkbckian skglvyn vrcqe gzvb kbe refj janqkuaiq ou qkhontzh mhznz, ne pxbjo qqkfwd joxxxu zmia blvjmqq xw wylzq ne px hwbib rlkvx cm vnclxq wdqmh,” sqpb Txijitwpn.</mw>
<w>Qv, gurxvn fon viyc ojz?</v>
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“Hv’a gzapeq hgl wvli dzzryteo pjm xwano dvvskwhzwg,” kq axlg. “Lwo zm gdbk spltsxknyn bsle ek aowaeu xh lesk wn arxg ypaam vudk hucan grvu mcavn iohu qeiwc, tuhk trwcl wey.” 

Steph Bailey

Steph Bailey is head of content at Sifted. Follow her on Twitter and LinkedIn

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