TLDR:
A promissory note is a written financial instrument that constitutes a promise by the maker to pay a specified sum of money to a named party at a definite time or on demand.
Promissory Note vs. Convertible Note
While both promissory notes and convertible notes are debt instruments, they serve fundamentally different purposes in startup financing. A plain promissory note is pure debt: it obligates the company to repay principal and interest on a specified schedule with no equity conversion feature. A convertible note is structured debt that is expected to convert to equity at a triggering event. In practice, pure promissory notes in startups are most common for intra-company loans, founder loans, and short-term bridge financing from existing shareholders who want simple documentation without equity complexity.