I am not sure I completely understand convertible notes so someone critique my interpretation here. Upstart could just issue stock. Instead, they are taking a loan which will at some point be paid back with stock (timing at their discretion). The value here would be that they can convert it at what they expect will be a much higher stock price in the future. This equates to no dilution now and much less dilution in the future than what they would have to do to sell stock directly now. [because you could use less shares to pay back the loan since they would be worth more presumably in the future]. Essentially, it is a vote of confidence in their growth.
Given no dilution now, this is a net positive for shareholders if you accept that them having more cash for growth is valuable. Is this right?