It's a convertible note, so it is a loan. I'm 100% positive that there are no personal guarantees and it is essentially entirely unsecured. Convertible notes are very common early investment tools when it is very hard to place an accurate valuation on the company. It significantly reduces the amount of paperwork involved and it allows the person providing the note a guaranteed seat at the A round table. Like most loans, it typically carries interest which accrues as part of the principal and adds to the conversion.