Conversion Price
The price at which a convertible note or SAFE converts into equity. It is typically the lower of either (1) the price paid per share in the most recent equity round, adjusted for a discount rate, or (2) the valuation cap divided by the total shares of fully diluted equity.
Convertible Note (Convertible Promissory Note, Convertible Debt, Convertible Loan)
A short-term debt instrument that converts into equity at a later date, typically used by early-stage companies to raise capital without immediately issuing ownership equity. In a convertible note, the investor lends money to the company with the intention of converting the loan into equity rather than receiving cash repayment. Commonly used by seed-stage startups, […]
Counsel (Lawyer, Legal Counsel, Advocate, Attorney)
A professional who practices law, applying legal knowledge, procedures, and experience to address specific legal issues or advance the interests of clients. A lawyer is licensed to practice in a particular jurisdiction after passing the required state bar examinations. In the context of an SPV, counsel typically provides assistance with fund documents, purchase agreements, securities-related […]