The big drawback is that it takes 3 to 6 months for the start-up to see money. First the contracts, then the money. And it takes time, especially with German investors. For a small tour of capital (less than 500k euros), the legal and notary fees are about 10,000 euros. This is not the time you waste as a founder. A convertible convertible bond (MCS) is a particular variant of the normal convertible bond, in which investor rights are limited.  Whereas in the case of a traditional convertible loan, the investor has the choice until the end of the maturity whether or not to convert it into shares, in the case of a compulsory convertible loan, the conversion to shares is mandatory no later than the end of the maturity. As a result, investors are at greater risk of losing their own returns in the event of a price decline. It therefore has the character of a loan that pays a coupon during the life, but which is repaid at the latest at the end with young shares. A convertible bond (including the convertible bond, convertible bond, convertible bond) is a bond issued by a limited company and generally with a nominal interest rate, which gives the bearer the right to exchange it in shares during a transition period to a predetermined relationship; Otherwise, the loan will be repaid at the end of the period. If this right to vote belongs to the limited company and not to the holder, it is called the reverse convertible bond.
More text on Techcrunch.com (2012) in English. Convertible loans are quick and dirty – which is sometimes enough for the start-up phase. You understand? If not, write me an email with your questions. You`ll find models here. In the case of the exchange of bonds , the option is not exchanged for shares of the issuer, but by a third-party entity.  It is very often used during the initial creation of the startup: a first investor makes available, through a converted loan, an amount by which the founders base the startUp company in the legal form of the LLC. The repayment of the loan is then made in whole or in part by the transfer of certain shares to the GmbH on a (approximate) date, under the valuation then given or, alternatively, by the granting of a corresponding tacit participation.