What is a Convertible Note?
A brief overview for founders evaluating startup financing options.
A convertible note is a form of debt that converts into equity—often during a startup’s next priced funding round. Unlike traditional loans, convertible notes usually don’t require immediate repayment and include features like valuation caps and discount rates that favor early investors.
Read NEXT’s full breakdown on how convertible notes work and why they remain a common tool for startup fundraising.
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