A convertible note is a loan that later turns into shares — usually at the next priced round, often at a discount. It lets a company raise quickly without agreeing on a valuation today, deferring that negotiation to the next round.
Where in the journey
Early; also used for bridges.
What the money is for
Raise fast without setting a valuation now.
Common investors
Angels, seed funds.
Watch out for
Interest and discount/cap terms can surprise founders when the note converts.