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Convertible Note

A Convertible Note is a type of short-term debt that converts into equity, typically in the form of shares in the company. It is often used by startups and early-stage companies to raise capital from investors without having to determine a valuation for the company at the time of funding. Instead of paying back the debt in cash, the amount borrowed (plus any interest) converts into equity (ownership shares) at a later financing round or other conversion events.

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