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Convertible notes are one of these other financial instruments and they have increasingly become the financial instrument of choice for . A convertible note is a form of short-term debt that converts into equity, typically in conjunction with a future financing round. In effect, the investor loans money to . Find out how startups can use convertible notes for funding, the components of a convertible note and the pros and cons - Anders CPA. All startups likely will seek financing at some stage during their growth.

Understanding the key terms in a convertible note financing will help you be able to effectively utilize this popular financing option for startups. Understand the complexities and details of convertible debt and the impact they can have on your business. Techcrunch has a great three-part blog post series that explores everything you need to know about convertible notes as an entrepreneur. Convertible debt is when a company borrows money from an investor or a group of investors and the intention of both the investors and the company is to .