Convertible note
MarketsDefinition
Short-term debt instrument used in early-stage venture financing that converts to equity at a future priced round. Includes a discount (10-30% off the priced-round price) and/or a valuation cap that protects the noteholder if valuation rises sharply.
SAFEs (Simple Agreement for Future Equity) replaced most convertible notes in seed-stage funding because they're simpler legally and don't accrue interest.
SAFEs (Simple Agreement for Future Equity) replaced most convertible notes in seed-stage funding because they're simpler legally and don't accrue interest.