I bootstrapped a product and found early traction. I'm working to secure seed funding via convertible notes.<p>My question is about the mechanics of the deal and the steps of negotiation. Assuming the angel investor does this often, is there an implied cap? Discount? Maximum dilution? How does this work with multiple angels?
Hey chad, I'll try to answer your questions briefly, assuming you're familiar with the terms you used... Yeah there will usually (more often than not) be a cap explicitly stated in the note. Sometimes notes are uncapped though. Discount will almost always be a term. Maximum dilution isn't a term I'm familiar with for Notes. For multiple angels you can set up a structure that allows multiple closings for the notes within a specified time frame (like 180 days). Hope that's helpful!