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[Music] hey everyone karen king here so convertible loan notes what are they firstly they are not a loan to buy a convertible no instead they are a mechanism that investors use to invest in a company as you may know there are two basic methods or ways to invest and this is through equity where you own a percentage of the business you are investing in and through debt where you dont own a percentage of the company but the company owes you back what you lent it at a later stage equity is generally more risky however has the potential for limitless rewards if the company does really well debt is generally less risky but has a fixed reward in that you know what the company is supposed to to pay you back over a given period of time a convertible loan note which is essentially a mixture of debt and equity it is essentially debt which can convert to equity at a later period of time so why would an investor want to do this well maybe the business seeking funding has the potential to be succes