The end result is that the conversion of the KISS convertible bond into shares without discount does not change the percentage of ownership of the Series A investor. This means that they always get the deal they negotiated for. In addition, founders must compromise and accept further dilution. But this is much less than what they suffered in the previous method. The basics of the agreement: The company agrees to raise a certain amount of money from an investor in exchange for an amount from the company that remains to be determined, based on the next round of financing. Don`t know what a KISS is and how it can help you? Read on to learn all about KISS convertible bonds. The basics of the agreement in one sentence: The company undertakes to sell a certain part of the company at a fixed price. It contains similarities with the SAFE instrument, the objective of which remains the same: to enable start-ups to obtain financing in a short time and at low cost, thus avoiding the long and expansive phase of negotiations that normally precedes an investor`s grant agreement. SAFE is known to be safe because there are no explosion clauses that can wipe out the company. The conditions are so strict that Y Combinator had to conclude four separate contracts to avoid complexity: these four types of SAFE are extremely simplified agreements and favor the company to the detriment of the investor. Convertible bonds were created as a solution for companies that are ”too early to evaluate.” If a business is just getting started, it can be difficult to justify the $5,000,000 valuation implied by the 10% deal for $500,000. The basics of the one-sentence deal: The company agrees to borrow money at a fixed interest rate with a fixed maturity date, and the principal and interest will be converted into shares of the company if and when the company embarks on financing by selling shares of its shares in a valued round….