For such a small amount comparative to a series A financing, is it possible to state the note will convert whenever the company reaches an x dollar valuation. I'm thinking whenever the valuation is 1000k. This would increase the amount of the equity upon conversion and be a better deal than when the company is valued for series A. Or is a better option to offer a higher discount rate (something like 50%???)
And another question that may be too broad, what is the typical range of pre-money valuations for a Series A?
Typically, convertible notes have a 20-50% kicker to the Series A round.
When you do a Series-A, everything will convert to the Series-A price.
You can do a conversion at a certain evaluation but that probably won't fly with a savvy investor. The best thing to do would be to convert everyone to the Series-A once you raise enough money. That way, it's a lot cleaner.
Isn't part of the point of doing a convertible note to avoid having to figure out the company's valuation? Very rare to have a convertible note convert into something other than Series A, unless it's a company sale.
Odd. Don't do this- just give a bigger discount.