It’s getting more and more common these days and it’s not that complicated.
The real question is where do you get the money to buy them out.
With more and more money into venture, and more and more rounds being oversubscribed, it’s more and more common for there to be options even relatively early (Series A round) to buy out early noteholders and equityholders.
I’ve done this myself (buy out earlier shareholders) at the Seed, A and B stages 4 times in the past 12 months.