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.

A convertible note is a financial instrument where an investor provides money to a startup, which is treated as a debt-like instrument with specific terms that need careful review.

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

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

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

It's crucial for founders to understand their dilution when raising money through SAFEs or convertible notes, as they may end up owning significantly less of the company than expected after a priced round.

In Boston, while SAFEs and convertible securities are common on the West Coast, local angel investors may be less familiar with these financing methods, indicating a need for education in the ecosystem. I recommend approaching fundraising with convertible securities because they can be done quickly and flexibly.

While priced rounds are still a common method for raising funds, they typically occur later in a startup's lifecycle, often after initial fundraising through SAFEs or convertible notes.

Angel investors often have experience in high-growth startups and can provide flexible terms and quick investment decisions, but they take equity and may have strong opinions about the business.