If a company is acquired or merges before a convertible note converts, the specifics of what a noteholder receives will depend on the specifics of their convertible note terms. The most company friendly terms call for the note to be repaid with interest to the investor. Most convertible notes call for the note to be converted to common shares in the company at a pre-set price just before the acquisition/merger, often at the same price as the cap of the note. Still, others call for the noteholders to be paid back their principal investment plus interest, plus a premium amount, generally, 0.25-1.5x of principal, though sometimes as high as 3x. Others give the noteholder the option of choosing between such outcomes.