Remember, before plunging into your next investment, it is always wise to educate yourself on what you are putting your money into. This week, we will dive into which companies provide a convertible security, along with a quick explanation into how it works.
Startups that offer FlashSeed Convertible Security
A Flashseed convertible security is a simpler and shorter version of many convertible notes. For the investor, it provides the opportunity to convert their investment into equity, if there is an equity round in the future where preferred shares are issued. It also offers provisions for early exit or dissolution of the company, and has preferrential provisions for investors such as discounts and valuation caps.
Unlike convertible notes, FlashSeed Convertible is not a debt instrument, which means there is no interest rate or maturity date. Because of this, there is a possibility that it never converts into equity. There is also nothing in the terms that call for an investment to be repaid.
Before you start your next equity crowdfunding investment, take the time to make sure the security offered is something that you are comfortable with. If you still have questions, don't hesitate to reach out to the startups for information, or check out our series on different security types.