One of the main advantages of convertible debt is that it ______.
A)doesn't need money to be paid back
B)removes the need for valuation
C)is less expensive than other types of loans
D)eliminates a need for venture capitalist funds

Question

Quizplus · Accepted Answer

Convertible debt removes the need for valuation, as the debt can convert to equity at a later point based on a pre-determined conversion rate. This allows startups to delay setting a valuation until a later funding round or exit event.

One of the Main Advantages of Convertible Debt Is That