Glossary · Fundraising instruments
Convertible note
A loan that is meant to turn into equity later, usually at a discount or with a valuation cap when you raise a proper round. Until then, it behaves like debt.
Related: SAFE · Valuation cap · Priced round · Venture debt · MFN clause (most favored nation)
A bit more nuance▾
- Notes often carry interest and a maturity date — unlike typical SAFEs.
- If conversion takes too long, you may need to extend or renegotiate.
Go deeper▾
Discussion questions▾
- What happens if the maturity date hits before you raise?
- Why might an investor prefer a note over a SAFE in your jurisdiction?
Educational reference only — not legal, tax, or investment advice. Terms vary by country and deal; ask a qualified professional when it matters.