After discussing how to price convertible notes, we realised that there is a simpler way to explain what they are.
Convertible notes are quite simple when understood. They basically are a debt that converts into equity when a certain event (trigger event) happens. They have however some common clauses that are key to determining the equity situation of all players. Here is a visual description:
Find precise calculations for different equity scenarios in our Convertible Notes Calculator
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Really like that description and explanation on convert notes.