Fundraising
Convertible Note
Quick definition
Debt that converts to equity at the next priced round.
A convertible note is short-term debt that converts to equity at a discount or cap at the next priced round. Less common than SAFEs at pre-seed and seed, but still used — especially for bridge financings between rounds.
Related fundraising terms
SAFE (Simple Agreement for Future Equity)
Convertible instrument commonly used for early-stage rounds.
409A Valuation
Independent valuation of common stock used to set option strike prices.
Cap Table
A record of all ownership interests in your company.
Pro Rata Right
An investor's right to maintain their ownership % in future rounds.
Got a finance question that needs more than a definition?
Talk to a real CFO. 30 minutes, no contract, free.
