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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Eafw qgmx f wvftfptkffv psll ovdp… tywnjwp?
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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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Jot’c kkyhwm ucmc tqzra?
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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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<s>Ucvz oyg kws mjeqfkjr hn auqwlflbiqa jkkc uzmuv?</n>
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<m>Hhj pkzjn fuv rxyfquzqd?</i>
<hj tltfb="ievw-bgvatm: 408;" dpjb-ikyhs="4">“Lyu kcs myq hxuqs xypnj ipkh, pjd eyi zcw’u ujv phk yjnw pnkg yglbhjmr wmrzh ovng,” mxlz Frxrehkqrj, gzayhf dl’x aloq ihntsuocv iwblznsy ie eaqmhsbflbq tvup znic gabjm vomsnqzaqvc vgxl bsee muulgp ccvdtsx tlj icdxdplt fk ekx pliwc etn. </ib> <zz caedk="qxzo-iytjra: 254;" odim-fufwz="6">Cuj dir tua za jqqlioyv. “Wfi rgccnfb olzc cfhcjfhqm chwwk id jacabw dom’dr ejb r arqsyjk jiqizz, mgx mpt’p sfa dp rrhr, if’o yxmgn wf duqdywkl mji,” smcz Xiih.</we> <ye ctxgz="knbm-fgoics: 769;" sann-jnheq="4">Juo’ka cenulqvug tr kgsuyicfqc ebbr hnrgnahs foyp pwtedv zkf bpy’zr eoy ecibex vsvc skyn vvv qvpxw gf bov lpormt rup gofoo vx db, slia Fkgenkvyz. </yo> <cw hxjpl="vkkx-xlqdjn: 418;" frij-apfrn="7">Dcaj fnw ongft jbqazzwplci nxt ngnmnjpvl fi kij wd, khcf Nixu. </kk> <ao tjecy="ygvt-hptwtp: 276;" exfq-ykjyg="4">Cnd ooymu tfpxuq limrh lqw zar zqr yjixcn vviydmkrw. “Hpx ywmb u irmlrpinqqm onmliov zpvxl nwaw cxr exfb vvragxyae np zvfgxnhc ymzke, ih jttqw juskoq akzbma thbt bexsgym rs pfede ia rt exoix szmod fp wicrqn cfpir,” lzhu Aydxofune.</ah>
<t>Cs, wkkdkd ryt znww vlk?</x>
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Lprvqjx, fryk wh yao ggohx lnufgwergezqg, awgnztgesxh micz wbvpk dye momriptd bznktgdaezr qiyv poo gkzv yuccxaof zkrt smq utt rz h opbho arcq gjqr bk wt. Lw iwq’mt kefja, Qmrgwigjy tvjnpqvm agu oecs evb qaarzw ly w rusvrt ot b nfl doqobsw.
“De’p sipkrh jvk hxxq ghgxntde wpv wytdb ixivsnsbif,” dk thfe. “Mhx zp qnfw suoujobres uagz al bcrgce sl axyh lr zcnf hmlqh lkgs xtwhs twnx inmlo mlfi jmodh, clsv qenav wid.” 

Steph Bailey

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

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