Early stage companies raising money have several core options to raise capital (e.g., crowdfunding). However, when raising money from funders who expect a return on investment (i.e., they are buying a security) those funders are essentially “investors” and the issuer company likely has triggered the securities laws. None of this should be cause for alarm

When an issuer is using a note series to raise capital (convertible or non-convertible), there are a variety of negotiated clauses that can both benefit and harm the potential investor. Often, properly calibrating these clauses to fit the risk appetite of both parties is a sophisticated process. While many discussions focus on conversion mechanics or