Convertible Note
Noun · Startup & VC
Definitions
A form of startup financing structured as debt that typically converts into equity in a later priced round, often with a valuation cap or discount. It is common in early fundraising when setting a full valuation is premature.
In plain English: An early investment that starts as debt and later turns into shares.
Example: "The seed money came in as a convertible note with a cap and discount."