Convertible loan

Are you looking for a flexible financing solution for your company without having to conduct a financing round?

A convertible loan (also called a convertible bond) makes it possible to raise capital that is later converted into shares. It offers a quick and uncomplicated financing option that can be suitable for growth-oriented companies.

About convertible loans

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Flexibility

A convertible loan offers startups and growth-oriented companies the opportunity to obtain financing more quickly than it is usually the case when raising equity capital. Investors have the right to convert the loan into equity at a later date.
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Interest rate and discount

As a rule, the convertible loan bears interest at a fixed rate, although investors often receive a
discount on the future company value upon conversion.
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No immediate valuation

Unlike in a traditional financing round, no immediate company valuation is required, which accelerates the capital-raising process and allows for flexible terms.
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Trigger events (conditions for conversion)

Conversion into equity occurs when certain conditions, known as trigger events, are met. These are usually occurrence of a future financing round and/or a specified time (known as maturity). The conditions can be negotiated individually.

Our Service Packages

Service package 1:

Drafting of a convertible loan agreement

A fixed fee starting at CHF 1,500 (plus VAT)

depending on complexity and scope.

What can you expect?
  • Initial consultation: We analyze the financing needs of your company and develop the key points of the convertible loan together.
  • Drafting the contract: Your customized convertible loan agreement is tailored to the specific requirements of your company.
  • Legal protection: Ensuring that the contract meets all relevant legal requirements and protects your company’s interests. 
  • Feedback round: After the contract drafting phase, we discuss the contract together in a feedback round and make any necessary adjustments.
  • Support: We also offer additional services such as representation and support in contract negotiations with investors (not included in the fixed price).
How long does it take?

As a rule, 1 to 2 weeks.

Who is it for?

Start-ups and growth-oriented companies looking for flexible financing solutions.

What is achieved?
  • Flexibility: Your company receives capital from investors without having to conduct a complex financing round. The terms of the convertible loan can be flexibly designed.
  • Fast financing: The uncomplicated structure and process of a convertible loan gives your company faster access to capital.
  • Legal certainty: An individually designed convertible loan contract minimizes legal risks and safeguards your interests.
Service package 2:

Drafting of a convertible loan term sheet

A fixed fee starting at CHF 1,000 (plus VAT)

depending on complexity and scope.

What can you expect?
  • Initial consultation: We analyze your company’s financing objectives and support you in defining the structure and conditions of your convertible loans.
  • Drafting: We create a term sheet tailored to your specific needs and negotiations with investors. It serves as a clear, negotiable basis for convertible loan agreements with investors. We ensure that all important parameters such as interest rate, discount, trigger events and other relevant details are clearly and transparently defined.
  • Legal validation: Ensuring that the term sheet covers all the essential points in a legally compliant manner and protects your interests.
  • Feedback round: After the term sheet has been drawn up, we offer a feedback round to discuss the document and make any necessary adjustments.
How long does it take?

As a rule, 1 to 2 weeks.

Who is it for?

Start-ups and growth-oriented companies that are looking for a flexible financing solution and need a legally binding term sheet as a basis for negotiating convertible loans.

What is achieved?
  • Clear basis for negotiations: You receive a well-structured term sheet that defines all the important terms and conditions for the convertible loan and serves as a basis for negotiations.
  • Flexibility: The term sheet makes it possible to agree flexible terms that are tailored to the company’s needs.
  • Legal certainty: A professionally prepared term sheet ensures that all relevant legal aspects are taken into account and helps avoid later disputes.

How can Vectra Advisors help?

Vectra Advisors is your first choice for convertible loans and term sheets. Our
LAWYERS+ support you quickly and pragmatically with all your legal needs. Let’s talk and get started!

Your contact for this topic:

Alex Bardin, Legal Expert

Alisa Burkhard, Legal Expert

Book a free, non-binding introductory call with us: