A convertible note is an instrument issued by a startup company evidencing receipt of money initially as debt, which is repayable at the option of the holder or which is convertible into such number of equity shares of such startup company, within a period not exceeding five years from the date of issue of the convertible note, upon occurrence of specified events as per the other terms and conditions agreed to and indicated in the instrument.
Source: https://www.rbi.org.in/