A convertible is a type of equity funding round, which provides you with another way to invest in businesses through Crowdcube.
It’s like a regular pitch on Crowdcube, but, instead of the company setting a valuation or share price, investors pledge to invest in multiples of £10.
At a later date, usually when a follow-on funding round is completed, your investment is converted into shares. The follow-on round may be carried out with Crowdcube, or it could be a venture-capital investment or other form of funding round.
If no follow-on round happens, your investment will usually be converted into shares on the agreed long-stop date at an agreed long-stop valuation, but the exact terms vary from business to business.
Some types of convertible investment – known as an advance subscription – are eligible for EIS. As with regular equity raises on Crowdcube, if tax relief is available, it will be shown on the pitch page.