A convertible note through to conversion, with the accrued interest converting alongside the principal. Unlike a SAFE, a note is debt: it accrues interest, it has a maturity date, and both of those are real terms rather than formalities.
Also called: convertible debt calculator, note conversion calculator.
$5,600,000.00 converts, being 5,000,000 of principal plus $600,000.00 of interest, into 1,400,000 shares at $4.00. 600000 of interest accrued at 8% simple over 1.5 years, and it converts rather than being repaid. It buys 150000 of the shares issued. The cap governed at 4 a share against 6.4 after the discount.
An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.
The note accrues interest, usually simple rather than compound, and at conversion the entire balance including that interest buys shares at the lower of the cap price and the discounted round price. The interest is therefore not repaid, it is converted, which makes an eight percent rate over eighteen months worth about twelve percent more equity to the investor. The maturity date is the other difference from a SAFE: if no qualifying round happens before it, the note becomes repayable, and a startup that cannot repay is negotiating from a weak position. That is the risk a SAFE was invented to remove.
the note accrues interest and the whole balance converts, so the interest buys equity rather than being repaidEach of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.
Amount converting$5,600,000.00
5m x 8% x 1.5, converting at the 4 cap price
Open this exampleAmount converting$5,611,844.62
boundary: 1.08^1.5 against 1 + 0.08 x 1.5
Open this exampleFormula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator