Does your business need capital?…
Have you considered a convertible note?

Here at Lawnch, we know that capital is the lifeblood coursing through the veins of every business.

Navigating the capital raising process can prove to be one of the most formidable challenges in the start-up landscape. A convertible note is just one avenue open to businesses to raise capital, and we have been on the team for many clients who have successfully undertaken capital raises via convertible notes.

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What is a convertible note?

A convertible note is a loan from an investor to your company. The loan must be into a company, as it can convert into shares in the company at a later point in time (if certain conditions of the convertible note are met). However, whether or not the convertible note does convert from debt into shares depends on the terms of the convertible note.

To book a free 30-minute consultation with one of our experienced team members, give us a call and we can lock in a time.

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What do I need to be ready to raise capital with a convertible note?

Before initiating a capital raise through the issuance of convertible notes, there are several preparatory steps to undertake. At a minimum, you should:

  • review the company’s Shareholders’ Agreement to ensure the rights and obligations of the potential future shareholders are adequately considered and addressed (for example, if a convertible note converts into an equity position of 15%, consider if it affords the investor a right to appoint a director, and whether this aligns with the company’s commercialisation strategy)
  • consider whether the company’s existing shareholders have a first right to contribute a loan, or a pre-emptive right to subscribe to a convertible note
  • consider whether board or shareholder approval is needed to approve a convertible note raise, and
  • consider and workshop the potential implications to the company’s capital table (and the founders’ interests) if all the funds raised via convertible notes convert into shares.

Need help navigating convertible notes? Send an enquiry and one of our team members will be in touch to schedule a free 30-minute consultation. 

Tammi and Ben, Lawnch Directors

Lawyers for fast-moving businesses

When your business needs rapid-response insights that come from experience, not theory, we’re who you talk to.

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The Lawnch difference.

Traditional professional services firm

Waits for you to tell them what to do

Slow to respond

Poor communicators

Forget the ‘service’ component of ‘customer service’

Provide documents that you don’t understand and hence can’t implement

Prepare agreements and documents that hold little to no practical value

Stiff and formal

The Lawnch way

  • Flips the traditional model on its head – by working with you proactively to help you identify what you don’t know
  • Responsiveness – we’re so quick to respond, we’ll be waiting on you
  • Active communicators – who move at the speed you set
  • Customer service – is at the forefront of everything we do
  • Workshop documents with you – so that you understand the implications
  • Align agreements and documents with your strategic goals – for both now and in the future
  • Vibrant and energetic – no suits and frowns here!

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