The rise of convertible notes from 2005 to 2009 allowed startups to raise funds faster as the cost to start a company decreased.

When you offer a convertible note, you're selling a promise of equity rather than actual equity in your company.

The rise of convertible notes in venture funding, largely due to Y Combinator's influence, has changed how early-stage companies raise capital.

Using convertible securities can lead to a larger number of investors in a startup, which can complicate administrative processes when seeking consent for future financing rounds.

Investors in convertible securities may write smaller checks and might not be as engaged as those who invest in priced rounds, which can affect the level of support and attention they provide to the startup.

The course will also explain the mechanics of startup investing, including how convertible notes work and the standards for interacting with founders.

Bridge loans, which are debt instruments used between two financings, often involve convertible promissory notes and can include common stock warrants. Bridge loan financing uses convertible promissory notes that convert into shares of stock during the next funding round, making it a flexible option for startups between major financing rounds.

Convertible securities, which are not stock themselves but convert into stock later, are commonly used in early-stage fundraising events.

Investing in a startup through a SAFE, convertible note, or equity will yield similar returns if the startup is successful, as seen with Airbnb's valuation growth.