Many risks are entailed in the process of raising capital in the
initial stages of a technological venture. As
a result, the negotiations between the parties can
take a long time, during which entrepreneurs find it
difficult to effectively promote the affairs of the project and
the company, as they are completely invested in raising
capital. On the other hand, investors also find
themselves investing significant time and resources in a
project that its future is veiled with uncertainty.
Investing through a convertible loan is a process
which its main aim is to simplify the process of
raising capital, both for the developers and for
the investor, and to assure that most of the parameters
of the current investment will be determined as a
function of the future fund raising performed by the company.