A convertible note is not equity. It is a debt instrument that may be converted into shares if the conditions for conversion in the convertible note agreement are satisfied.
Another benefit is that, if the company is wound up, the loan will need to be paid out before any distribution can be made to the company's shareholders. However, whether this is actually a benefit will depend on the financial position of the company. If the company has no assets to repay the loan, the investor will not be paid out and will be in effectively the same position that they would have been in, had they been a shareholder.
RPM Price at posting:
8.5¢ Sentiment: None Disclosure: Not Held
