Convertible Note

Also called Note

A loan that is meant to convert into equity at your next round instead of being paid back in cash. Like a SAFE, but structured as debt, so it carries interest and a maturity date.

Why it matters

Notes were the standard before SAFEs and are still common, especially outside the US. The interest and maturity date are real obligations, so knowing how they differ from a SAFE keeps you from signing up to terms you did not mean to.

Related terms

SAFE Valuation Cap Dilution
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