How convertible notes can help you raise capital, faster

For Founders seeking cost-effective ways to raise capital, convertible notes ("C-Notes") may be the way to go. They're quick, simple and relatively cheap - but worth understanding before jumping in headfirst. Today we explain what C-Notes are and how they work, while debunking some common misconceptions along the way. Strap in, read on and learn if C-Notes are just the thing to get your start-up off the ground.

What are convertible notes and how do they work?

C-Notes are (typically) short-term hybrid debt and equity instruments. Put simply, they're like an IOU between a start-up and investor. C-Notes allow investors to front up capital in the form of interest-accruing loans that, down the line, convert into Company shares. (This happens after a "triggering" event, which we'll explain later on.)