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Ask HN: What happens if you have a convertible note and are acquired?

1 points by haihai ↗ HN
If I have a $500k convertible note and then raise VC later it's easy: the note converts to shares at a discount.

But what if I sell before before the note has converted t shares? It wouldn't make sense to treat the acquisition price as "financing", so what typically happens?

What if the company is highly profitable and never raises more money and never gets acquired?

1 comment

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sajid
In both cases, the investor typically has the option to seek repayment or convert. The conversion would be at the valuation you agreed for the note.