In poker, deuces are often called the wild card. You can use the card as a ‘Two’ or as any other card in the deck. In effect, you can convert the card to something else. Well, convertible debt uses the same principle in business. The holder of the convertible instrument has a choice, continue to collect interest as a debt instrument or convert the debt to equity.
Equity Based Programs
A sophisticated type of indirect compensation; this type is not customarily used in the small business world due to ownership issues. It transfers ownership of the business to an employee based on personal and company performance.