A convertible note is an investment tool that starts as debt but is designed to convert into equity at a later funding event, usually during a priced round. It allows investors to provide capital upfront without immediately determining the company’s valuation. Instead, the note includes terms like a valuation cap, interest rate, and discount, which define how the investment will convert when equity is issued. Convertible notes are widely used in early-stage fundraising because they are faster and simpler to execute than traditional equity rounds.

If your business is pre-revenue or growing fast and you need funding before locking in a valuation, convertible notes give you flexibility and time. They allow you to secure capital without diluting your ownership prematurely or getting stuck in lengthy negotiations. This type of investment gives you space to prove your model, attract strong future investors, and convert early support into long-term alignment.

At Aranea Capital, we connect you with investors who understand the nuances of convertible note structures and are comfortable working with early-stage businesses. We help you clarify your terms, communicate your growth story, and match with partners who invest with patience and purpose. Our role is to open doors—not manage your cap table—so you can move forward with confidence and control.