If you do not want to always issue simple share options to a shareholder or the investors in your company, then you might need to use a convertible note.

Here is how to issue and modify a convertible note in Eqvista:

Step 1: The first thing to do is log in to your Eqvista account and select the company account. 

Eqvista login

After this, you will be directed to the company dashboard. Select “Securities” from the drop-down menu and click on “Convertible Instrument”

convertible instruments

Step 2: You will then be directed to a page where you can see all the convertible instruments available. 

To add a new one, click on “Issue Instrument”.

issue convertible instrument

Step 3: You will reach the page where you will first have to select the instrument holder. To do this, click on the field available and a drop-down list will show up. Select the shareholder to whom you are about to issue the convertible note.

Note: The shareholder profile should have already been created. Check out the support article to add a shareholder.

instrument holder

Step 4: Once you select the shareholder from the list, new fields appear as shown below.

Convertible note type

You will have to add the note name, the issue date, and the note type. In this case, we selected the Standard Convertible Debt (Note). 

Step 5: The moment you select the note type, some other fields open up.

investment of funds

The second panel below the type of note would be the – Investment of Funds. In short, once you add in the details of the Note Type, this panel shows up with four more fields to fill in:

  • Principal: The original amount that the company borrows. 
  • Interest Rate: Rate on the principal amount that is accrued.
  • Maturity Date: The date when the payment has to be made back to the note holder.
  • Accrual Frequency: This is the frequency of the interest amount. Once you select the answer to this option, another panel will appear below.

Below this panel is the – Conversion to Shares that are seen under the Investment of Funds.

Here, there is only one field where you need common stock or preferred stock the security turns to. Select the kind of stock that the convertible note would turn into. In this case, we selected common shares.

conversion to shares

Step 6: As soon as you select the kind of stock it converts to, some other fields appear below in this panel itself.

conversion discount

Here, there are four additional fields that you would have to fill in, which are:

  • Conversion Trigger Amount: This is the minimum amount that will trigger the conversion rate.
  • Valuation Cap: The maximum company valuation when converting the note to shares in the company. 
  • Early Exit Multiple: This is the guaranteed multiple of the principal paid out. It can be kept as “zero” by default.
  • Conversion Discount: This is the discount that is applied to the purchase of shares during the valuation of the company.

Fill in all the details based on your plan and click on “Submit”.

Step 7: Once you click on “Submit”, the Standard Convertible Note will be created and you will be directed back to the next page that will show the details of the security.

Note: While the note was created, it was also issued to the shareholder. So, the creation of a convertible note can also be called the issuance of a convertible note.

edit security

From here, click on Actions and a drop-down menu will appear as shown below. There are four options for altering the convertible note. They include:

  • Edit Note: For editing or modifying a part of the security.
  • Convert to Stock: This is to convert the note to stock manually before the maturity date.
  • Mark as Converted: In case you have already converted the note to stock for the investor, you can mark it converted here easily.
  • Delete Note: This is to delete the security created in case the deal goes off with the investor or for any other reason.

Let us say that you want to modify the note. Then, select the option “Edit Security”.

Step 8: By selecting this, a pop-up window will appear. It would have almost all the information that you just added when issuing the note. The dialogue box has been shared below in parts.


Change the details that you want to and select “Save”.

Step 9: Once you do this, you will be directed to the updated page of the security as below.

convertible note overview

Like this, you can easily set up, issue, and modify a Standard Convertible Note on Eqvista. If you want to know more or understand any other process, check out the other support articles here or contact us today!

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