← Business Dictionary
FundraisingAdvanced

Convertible Note

A loan from an investor that later converts into shares instead of being paid back in cash — often with a discount as a reward for investing early.

Example

A ₹50 lakh convertible note turns into equity at a 20% discount when you raise your next round.

Related terms

SAFE
A simple fundraising contract where an investor gives you money now in exchange for shares later, usually at your next priced round. Quick and founder-friendly.
Valuation
How much your company is judged to be worth. 'Pre-money' is the value before new investment; 'post-money' is pre-money plus the money raised.
Dilution
When new shares are issued (to investors or employees), each existing owner's percentage of the company shrinks — even though the company is usually worth more overall.

Building a startup?

Base 91 Hub takes founders from idea to launch — tracker, community, AI toolkit and this dictionary, built in.

Create your account