Raise now, price later. How convertible notes work.

A convertible note is a short-term debt instrument startups use to raise early money that later converts into equity, usually at the next priced round, often with a discount or valuation cap that rewards the early investor. It lets you raise without setting a valuation now. We keep your cap table organized so notes are tracked correctly.

An investor lends money now, and instead of being repaid in cash, the note converts into shares at a future financing, typically with a discount or cap, so the debt becomes equity later. We flag how the terms affect your future ownership so early money does not surprise you when it converts.

A valuation cap sets a maximum valuation at which the note converts, and a discount gives the investor a reduced price at the next round, both rewarding the early risk, and a note may have one or both. We flag how these translate into future ownership so you understand the dilution the note carries.

A convertible note is debt, with interest and a maturity date, while a SAFE is not a loan and has neither, so the note behaves more like traditional debt until it converts. We flag the trade-offs so you and your investors use the instrument that fits your situation.

In principle it is debt and could come due at maturity if it has not converted, though the expectation is usually conversion at a financing, so the maturity date and terms matter. We flag how your note behaves if a round does not happen so a maturity does not catch you off guard.

It represents future dilution: the note converts into shares later, so stacking several can dilute founders more than expected once they convert. We keep your cap table organized so you see the impact before it hits rather than being surprised at the next round.

Generally the standard startup instruments assume a corporation with stock, so raising this way usually means being or becoming a C-corp. We form the corporation so you can raise on notes or SAFEs with a clean structure investors expect.

Convertible notes carry an interest rate that usually accrues and converts rather than being paid in cash, and a maturity date by which conversion is expected, so both are negotiated terms. We flag how interest and maturity affect conversion so the note's economics are clear before you sign.

We form the corporation, set up the cap table, and flag how notes, caps, discounts, interest, and conversion affect your ownership, coordinating with counsel on the instruments, so you can raise on notes with a clean structure and a clear view of dilution.