In today’s episode of our convertible debt series, we discussion a few other terms that come into play with a transaction.
Interest Rate: We believe interest rates on convertible debt should be as low as possible. This isn’t bank debt and the funders are being fairly compensated through the use of whatever type of discount has been negotiated. If you are an entrepreneur, check out what the Applicable Federal Rates (AFRs) are to see the lowest legally allowable interest rates are and bump them up just a little bit (for volatility) and suggest whatever that number is. Typically we see an interest rate between 7% and 10%.
To read the full, original article click on this link: Convertible Debt – Other Terms | Ask the VC
