angelschool

Convertible Notes are a popular early-stage investment instrument used by startups to raise capital before a formal valuation is established. Instead of issuing equity immediately, a startup receives funding as a loan that later converts into equity during a future financing round. This conversion usually happens at a discounted price or with a valuation cap, rewarding early investors for taking higher risk. At Angel School, learning about convertible notes helps aspiring founders and investors understand how early-stage funding deals are structured and negotiated in the venture capital ecosystem.