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A Directors’ Resolution to Issue Convertible Notes is a formal document that the board of directors of a corporation may use to authorize the issuance of convertible notes.

Why can’t startups issue shares of Common Stock to investors?

Startups can, in fact, issue shares of common stock to investors. Usually, friends and family members are issued shares of common stock. However, not all investors will accept shares of common stock for their investment.

They will usually prefer shares of preferred stock with special rights. These are called convertible notes.

How do I set up convertible notes?

Once a board approves fundraising with convertible notes, they can issue a first round of convertible notes.

This document allows a board to issue subsequent convertible notes for further fundraising.

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