Convertible Security

A convertible security is a financial instrument that can be converted into another form, usually common stock. Convertible securities, such as bonds or preferred shares, offer investors the benefits of fixed-income investments with the option to convert into equity, depending on the security’s terms. They are often used in venture capital or private equity to balance risk and potential upside.

• Financial instrument that can be converted into equity.
• Offers fixed-income benefits with equity conversion potential.
• Commonly used in venture capital and private equity.
• Provides balance between risk and potential growth.