Convertible Note
Definition
A convertible note is a loan that converts into equity at a future priced round, carrying an interest rate (typically 4 to 8 percent) and a maturity date (typically 18 to 24 months), usually with a valuation cap or discount.
How it comes up in fundraising
Notes preceded SAFEs as the default early-stage instrument; in 2026 they survive mainly in bridge rounds and some non-US deals.
Frequently asked questions
What is the difference between a convertible note and a SAFE?
A note is debt with interest and a maturity date that can technically be called; a SAFE is not debt, has neither, and cannot be called.
What happens at a note’s maturity date?
If no priced round has occurred, the note is technically repayable; in practice holders usually extend, convert at an agreed valuation, or negotiate.
Round Funded resources
Put this term to work
Definitions win negotiations only when you are in one. Find the investors who fund your stage and start the conversation.
Browse the investor database