# Convertible Note

*Startups & Venture Capital — Finicade finance glossary*

A convertible note is a loan that converts to equity at the next priced round, usually with a discount and a valuation cap. Being debt, it carries interest and a maturity date, which creates real pressure: if no round happens before maturity, the investor can in principle demand repayment from a company that has none. SAFEs were designed specifically to remove that cliff.

**Also known as:** convertible loan note, CLN, bridge note

**Related terms:** [SAFE](https://finicade.com/glossary/safe), [Valuation Cap](https://finicade.com/glossary/valuation-cap), [Bridge Round](https://finicade.com/glossary/bridge-round), [Dilution](https://finicade.com/glossary/dilution), [Seed Round](https://finicade.com/glossary/seed-round)

**Taught in:** Quant Quest — Credit Derivatives

Source: https://finicade.com/glossary/convertible-note