A Convertible Promissory Note acknowledges a Convertible Debt loan given to your startup. Convertible Debt accrues interest, and at the time of maturity (a period of 9 months to 2 years) must be repaid in full. If the lender chooses, the Convertible Promissory Note (given to him or her in return for the loan) can instead be converted into equity (shares of Preferred Stock) in your startup. In the real world, Convertible Debt will probably be repaid only if your startup is sold before its first round (Series A) of venture financing. If the Series A financing round is achieved, the Convertible Promissory Note will almost certainly be turned into shares of your startup’s Preferred Stock. This is what the note holder hopes in that it will provide a significant return on his or her original investment. By a wide margin, for startups Convertible Debt is the most common form of pre-Series A financing.