I'm in the UK and in negotiations with a potential angel investor. The offer they have made is a loan note that would be repayable on exit, in exchange for equity. I hadn't heard of this before, is this normal? Is there anything I should be aware of (other than the investment would be paid back at exit)?
This sounds like a "Convertible Note" which is fairly common, at least in the US. Here is a good definition: http://startuplawyer.com/startup-law-glossary/convertible-note
I'm not sure how these are typically structured in the UK so you'll definitely want to speak to a local lawyer about it.
Answered 9 years ago
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