Convertible Note

A convertible note is a type of investment security that startups use to raise money from angel investors and venture capitalists.

Instead of giving investors a stake in the company (like stock), convertible notes give investors the right to buy shares at a fixed price (often called the “conversion price”) after a certain point in time or when the company raises a certain amount of money. This makes it easier for startups to raise money because they don’t have to worry about setting a valuation for their company and can just focus on hitting milestones that will trigger the conversion of the notes into shares.


Want to learn more but aren’t sure where to start? You can explore 168 crowdfunding investment platforms in our database and learn more about the nuts and bolts of crowdfunding and alternative investing on our blog. Did you know you can use a self-directed retirement account to invest in many alternative investments? Rocket Dollar makes it easy, and when you sign up using that link you'll be helping to support YieldTalk.