investment, trademark, incorporation, convertible-noteI have incorporated a Delaware Corporation last year for filing trademarks.
I’m the only founder. I have not issued any shares yet. Do I have to issue some shares myself before going for convertible note investment?
As always I’d recommend having a lawyer involved in any raising of investment, so they’d be able to put you right.
However, there is no harm in making enquiries regarding investment before you assign shares if you don’t know what the exact company structure is going to be. However, not knowing your company structure makes you less investible as many investors will put money into a team rather than an idea. Also the investor would have no evidence that you and your co-founder can work as a team.
Taking and negotiating investment is a big decision, strategy wise, for a start up. Before deciding your investment strategy I’d research what you are getting yourself into, what different types of money can mean and where they will push you, what the structure of your business is going to be and how you plan to grow it, what shares are and how investment works.
so, to answer your question. yes you could go for a convertible note without issuing founder shares, but I’d be concerned about any investor willing to invest in a company that does not yet know it’s structure.
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