convertible debt term sheets and legal advice


I've just registered my new startup with the government so now the company is officially incorporated! (yippee!)

I would now like to make a loan of about $5,000 to the company with my personal funds to get it off the ground. I consulted a lawyer who estimated that it would cost $1000 in legal fees to write up the paperwork. Is there a basic convertible debt term sheet that I could use instead? I just can't justify spending $1000 of the $5,000 that I'm putting in on lawyers fees upfront.

Any suggestions? Thanks!

Legal Seed Funding Budget Legal Documents Debt

asked Aug 13 '11 at 11:22
6 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans
  • Get a new lawyer. $1000 for paperwork to make a loan from yourself to your newly formed company? Wow. I am in the wrong business! If this is convertible debt form someone else - then consider looking over on venturehacks for their convertible note "template" and other docs. – Tim J 13 years ago

2 Answers


Nolo Press has some simple forms that will do the trick. You don't need anything fancy.

A grand for a simple one page note is ridiculous. As Tim mentioned, time for a new lawyer.

answered Aug 15 '11 at 04:13
Jarie Bolander
11,421 points


I'm no lawyer, but I don't think you should even bother doing paperwork right now.

I'd focus on product and customers instead of nailing down specifics on this. Also, since you own 100% of the company right now, how will this $5,000 even convert into debt, since you already own 100%? You might not even need to do the paperwork... instead maybe just file it in QuickBooks and talk to an accountant instead. In summary, I would focus on making sure you actually have a business - a product customers are willing to pay for - before worrying about stuff like this, especially given it's only $5,000. You can always sort this out later once you've made it.

answered Aug 15 '11 at 09:36
Alex Cook
641 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Legal Seed Funding Budget Legal Documents Debt