A convertible note is a form of debt that can be converted into equity upon certain conditions and/or if the noteholder elects to convert. This mechanism is commonly used for early stage investing in startups and for later stage bridge financings. Typically, startups will include a conversion discount and/or valuation cap, the purpose of which is to provide the investor a discount when the convertible note converts into equity upon a subsequent qualified financing.
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The Ultimate Guide to Convertible Notes for Startups
Navigate startup fundraising with confidence using our comprehensive guide on convertible notes. Learn their mechanics, optimal use cases, and how they stack up against SAFEs and priced rounds. Essential reading for startups aiming for savvy financing decisions.
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Startup Financing: The Seed Round
If you’ve yet to raise outside capital for your startup, you’re probably still working full-time elsewhere and bootstrapping the startup with your own money. At this point, you’re probably ready to quit your job and focus on building the startup. If so, it’s probably time to raise seed capital.
