CONVERTIBLE SECURITIES

“Eric, we’ve been patient, but it’s time.”

He had been bracing for this moment for weeks now.

He leaned back in his chair, steadying his voice. “I understand. But we’re on the brink of closing our Series A. The product is finally gaining traction. It’s not the right time to pull the plug — it’ll tank everything we’ve built…”

The investor didn’t flinch. “Potential isn’t cash, Eric. We’ve given you every chance to succeed, but numbers don’t lie. Burn rate’s too high, and revenues are not where they should be. The maturity date on our convertible note has come. We’re not running a charity here.”

Eric felt the pressure mounting.

“You know we don’t have the cash to pay you back, right?”

The investor blinked.

Eric leaned forward with newfound confidence:

 “If you call the note, it won’t just hurt me. You’ll get nothing—because there’s nothing to give. No cash, no repayment. You’d lose your entire investment.”

The investor’s jaw tightened.

 “Sixty days, Eric. That’s it. If you don’t close the round by then, we’re calling it. Unless you have something better to offer?”

Then it hit him.

The investor wasn’t after repayment. He wanted leverage to negotiate a bigger slice of his company.