Overview of an Approve Fundraising with Convertible Notes

Essentially, a Directors’ Resolution to Approve Fundraising with Convertible Notes is a form of short-term debt that converts into equity.  Usually, it is of use in a fundraising event. Basically, this allows investors to provide a loan to the company in exchange for shares in the company versus principal and interest and future repayment.

Basically, this template is a Directors’ Resolution to authorize the use of convertible notes in a fundraising event. 

What is in a Directors’ Resolution to Approve Fundraising with Convertible Notes?

In essence, a simple majority of directors of the company must approve a Directors’ Resolution to Approve Fundraising with Convertible Notes. Additionally, the resolution must contain the following:

Details of the meeting (if using Board Minutes): A short statement describing when and where the meeting was held.

Date of passing the resolution: When this resolution was passed.

Details of the investor(s): Information regarding the investors who will be lending money and be issued for the convertible note.

Principal amount of subscription: Amount of the note that will be issued.

Company proposal to execute a Convertible Note Instrument: The company must provide details on how the note will be provisioned and the terms of the instrument.

When Should You Use a Directors’ Resolution to Approve Fundraising with Convertible Notes?

Usually, if a meeting of the board of directors convenes to address the issue, use the Board Minutes to Issue Convertible Notes. Or, if the board resolution will pass by way of a written resolution, use the Written Board Resolution to Issue Convertible Notes.

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