The good thing about a convertible note is that the risk is low. You can choose never to convert into stock and simply be repaid your money plus 8% interest. Nobody gets excited about an 8% return, but it works almost like a lottery ticket.
You buy the chance and wait to see whether the company succeeds. If it doesn’t, you take your money back and move on to the next deal. If it does, you convert and get the equity upside. This discussion, from our Washington, DC investor luncheon, relates to the Utility Rescue/BillBots opportunity.
Key points
- A convertible note can be repaid with interest (8% in this deal) if you don’t convert.
- If the company succeeds, you can convert into equity.
- It offers lower risk with optional upside.
Accredited investors: learn about current opportunities at tickertapeinvestments.com.
