Background Note | HBS Case Collection | September 2012 (Revised September 2016)

Convertible Notes in Seed Financings

by Ramana Nanda, William R. Kerr and Robert F. White


This note introduces convertible notes in angel financing. It begins by delineating the differences between a priced and non-priced round. It then describes a specific example of a convertible note, with attention paid to technical details regarding valuation caps.

Keywords: financing; Finance; Entrepreneurship;


Nanda, Ramana, William R. Kerr, and Robert F. White. "Convertible Notes in Seed Financings." Harvard Business School Background Note 813-017, September 2012. (Revised September 2016.)