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.

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.

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 like SAFEs allow startups to raise funds without the burden of debt, making it easier for founders to focus on building their companies rather than managing loans and interest.

Convertible notes are great for quick fundraising, but equity is often preferable for larger amounts due to better management and oversight.

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

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.

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.