Convertible Note (Convertible Promissory Note)

Convertible Notes, also called “bridge loans,” are loans provided to the Company that will be converted to Company capital stock at some specified future event. The Convertible Notes bear interest — typically 5-10% — and will generally be converted on the same terms as the principal. Convertible Notes will have some repayment date, ranging from as short as a few months to three or more years. Most often they fall in the 12-18 month range. Beyond that, the Investors can demand repayment of interest and principal.