Why might the investors want a convertible note instead of getting straight stock in a start-up?

Vivid Sky’s sole product, SkyBOX, was designed to provide sports fans in a stadium with continual access to videos, sports statistics, info-graphics (e.g., pitch locations and hit/out locations), maps, chats and concession-ordering capabilities—giving the fan in the stadium “the best seat in the house.”
To reach this point, Vivid Sky’s founder, Tim Hayden, had achieved numerous developmental milestones since 2003 using nothing but bootstrapped help and his own cash (and very much his own credit cards). The software was ready for deployment on iPhones and other 3G cell phones and laptops/desktops.
The back-end programs to run in stadiums to gather and tie together the many data streams and feed them to SkyBOX users were ready to go. What was needed now was $1 million to deploy the programs in the baseball, football, basketball, and hockey stadiums in North America starting with the 2009 baseball season.
Through an innovative product, a positive attitude, and tireless networking, Tim had convinced four Fortune 1000 companies to seriously consider investing $500,000 toward the million-dollar round. The companies were all in the entertainment business, and all saw the SkyBOX as a vehicle for selling content on a new platform, the cell phone. Tim still had to raise $500,000 before any of the big players would put their cash in.