Convertible Note Calculator

Svensk översättning: Pre-seed and seed financing before a company is ready for a priced round. This application is commonly used by professionals who need precise quantitative analysis to support decision-making, budgeting, and strategic planning in their respective fields

Svensk översättning: Bridge financing between Series A and Series B when the company needs capital to reach milestones. Industry practitioners rely on this calculation to benchmark performance, compare alternatives, and ensure compliance with established standards and regulatory requirements

Calculating conversion aktier for Series A pro-forma cap table modeling. Academic researchers and students use this computation to validate theoretical models, complete coursework assignments, and develop deeper understanding of the underlying mathematical principles

Comparing konvertibelt skuldebrev vs. SAFE economics for a specific financing scenario. Financial analysts and planners incorporate this calculation into their workflow to produce accurate forecasts, evaluate risk scenarios, and present data-driven recommendations to stakeholders

Svensk översättning: Maturity extension negotiations with existing noteholders — This application is commonly used by professionals who need precise quantitative analysis to support decision-making, budgeting, and strategic planning in their respective fields

Vad är the difference between a konvertibelt skuldebrev and a SAFE?

Both instruments convert to equity at a priced round, but they differ structurally. A konvertibelt skuldebrev is debt: it carries an räntesats (typically 4-8%), has a förfall date (usually 12-24 months), and creates a legal obligation to repay if not converted. A SAFE is not debt: it has no interest, no förfall date, and cannot be called. The SAFE was designed by Y Combinator in 2013 to eliminate the complexity and administrative burden of konvertibelt skuldebrevs. Konvertibelt skuldebrevs offer investors additional protections (förfall forcing function, repayment right, interest accrual) while SAFEs are simpler and more founder-friendly. In practice, the most significant differences at conversion are that konvertibelt skuldebrevs carry upplupen ränta (increasing the conversion amount by 10-20% for typical holding periods) and that förfall dates create leverage for investors.

Is interest on a konvertibelt skuldebrev betald in cash or converted to equity?

In most startup konvertibelt skuldebrevs, interest is not betald in cash during the life of the note. Instead, it accrues and is added to the huvudbelopp at conversion — the noteholder receives equity representing both the huvudbelopp and the upplupen ränta. This is called payment-in-kind (PIK) interest. Some notes specify compound interest (interest accrues on the growing huvudbelopp+interest balance) while others specify simple interest (interest accrues only on the original huvudbelopp). The difference matters: $500,000 at 8% compounded monthly for 18 months accrues $63,077, while the same note with simple interest accrues exactly $60,000. Always check whether interest is simple or compound when analyzing konvertibelt skuldebrevs.

What happens when a konvertibelt skuldebrev reaches förfall?

When a konvertibelt skuldebrev reaches its förfall date without a qualifying financing event, the company technically defaults on its debt obligation. In practice, this almost never results in forced repayment because startups rarely have the cash, and sophisticated investors know that forcing repayment might kill the company they are trying to invest in. Instead, founders and investors typically negotiate: (1) an extension agreement granting 12-18 more months, often with improved investor terms such as a lower valuation cap, higher räntesats, or warrant coverage; (2) automatic conversion into equity at a predetermined price (some notes include this provision); (3) conversion at a negotiated price that is below what a priced round would establish. The förfall date gives investors leverage but is rarely used as a hard enforcement mechanism.

Vad är warrant coverage in a konvertibelt skuldebrev?

Warrant coverage is an additional incentive sometimes included in konvertibelt skuldebrev terms. Warrants give the investor the right (but not obligation) to köp additional aktier at a specified price (typically the conversion price) for a specified period. Vanliga warrant coverage is 10-25% of the huvudbelopp amount — an investor putting in $500,000 with 20% warrant coverage receives warrants to köp aktier worth an additional $100,000 at the conversion price. Warrants are sometimes added to make konvertibelt skuldebrevs more attractive in difficult fundraising environments, to compensate for förfall date extensions, or to attract larger checks. Warrants add modest additional dilution but can be significant for large notes.

Hur konvertibelt skuldebrevs affect the cap table?

Konvertibelt skuldebrevs appear on the balance sheet as liabilities (debt) until they convert. They do not appear on the equity cap table until conversion. However, investors and founders track the shadow cap table — a pro-forma view of what the cap table will look like after conversion, usually modeled at the expected Series A terms. This shadow cap table is essential for accurate dilution modeling, as the converting notes will create significant new aktier. When building a pro-forma for a Series A, the investor's model will include note omvandlingar in the fully diluted pre-money share count, affecting the per-share price and dilution calculations.

Should a startup use a konvertibelt skuldebrev or a SAFE?

For most US early-stage startups, the post-money YC SAFE is simpler, cheaper (no legal fees for interest, förfall, and default provisions), and more founder-friendly. The SAFE is preferred when the investor community is comfortable with it (most US seed investors are), when the company wants to minimize legal complexity, and when the founder does not want a förfall date creating leverage for investors. Konvertibelt skuldebrevs may be preferable when investors specifically request debt treatment, when the financing is very small and the investor wants the förfall forcing function, in international markets where SAFE legal and tax treatment is uncertain, or when the company wants the ability to offer warrant coverage as an added incentive.

Vad är a konvertibelt skuldebrev's conversion price without a cap?

Without a valuation cap, a konvertibelt skuldebrev converts at a discounted price relative to the next round's price: Conversion Price = Series A Price x (1 - Discount Rate). If the discount is 20% and the Series A is $2/share, the note converts at $1.60/share. Without a cap or discount, the note typically converts at the Series A price — providing no economic advantage to the early-stage investor relative to a Series A investor, which fails to adequately compensate for the significantly higher risk taken at the early stage. Notes without caps or discounts are rare and generally considered below-market terms for investors.