Convertible Note Financing Deal Control and Closing Checklist

Original practitioner master 路 Prepared 29 September 2026 路 Proof review required

Convertible Note Financing Deal Control and Closing Checklist

Control Principles

One row, one accountable owner, one due date and one linked item of evidence.
鈥淐omplete鈥� means reviewed and reconciled, not merely received.
Freeze the NPA, note and side-letter forms by version and hash; log every deviation.
Never combine principal, interest, conversion, maturity, security or priority assumptions across inconsistent documents.
Do not issue a note because funds arrived. Acceptance, signatures, cleared funds, instrument ID and register entry must converge.
Treat maturity as an active project date, not boilerplate.
Stop on an unexplained finder fee, interest/usury concern, lien conflict, public solicitation, cap-table mismatch or wire-identity mismatch.

Master Deal Sheet

Field	Entry
Company / jurisdiction	摆鈼庐
Company counsel / finance owner	摆鈼庐 / 摆鈼庐
NPA / note / side-letter versions	摆鈼庐
Target / maximum / minimum principal	摆鈼庐 / 摆鈼庐 / 摆鈼庐
Interest / compounding / day count	摆鈼庐 / 摆鈼庐 / 摆鈼庐
Maturity / extension mechanics	摆鈼庐 / 摆鈼庐
Cap / discount / qualified-financing threshold	摆鈼庐 / 摆鈼庐 / 摆鈼庐
Prepayment / change-of-control treatment	摆鈼庐 / 摆鈼庐
Ranking / security / subordination	摆鈼庐 / 摆鈼庐 / 摆鈼庐
Exemption / solicitation policy	摆鈼庐 / 摆鈼庐
First close / outside date	摆鈼庐 / 摆鈼庐
Form D / state-notice owner	摆鈼庐 / 摆鈼庐
Note-register owner	摆鈼庐

Phase 1 鈥� Financing Architecture and Authority

ID	Control item	Owner	Status / evidence
A-01	Confirm capital need, runway, uses, target and maximum principal	摆鈼庐	摆鈼庐
A-02	Compare note, SAFE and priced-round alternatives; record selected rationale	摆鈼庐	摆鈼庐
A-03	Select stand-alone notes or NPA structure and freeze forms	摆鈼庐	摆鈼庐
A-04	Set interest, maturity, cap, discount, conversion threshold and downside treatment	摆鈼庐	摆鈼庐
A-05	Decide secured/unsecured, ranking, subordination and negative-pledge position	摆鈼庐	摆鈼庐
A-06	Review charter, bylaws and board/stockholder approval requirements	摆鈼庐	摆鈼庐
A-07	Review investor protective provisions, preemptive rights, ROFRs and consent rights	摆鈼庐	摆鈼庐
A-08	Review existing loans, liens, guarantees, SAFEs, notes and side letters	摆鈼庐	摆鈼庐
A-09	Identify conflicts, related parties, insider lenders and use-of-proceeds issues	摆鈼庐	摆鈼庐
A-10	Prepare board approval with maximum principal and change guardrails	摆鈼庐	摆鈼庐
A-11	Obtain lender, stockholder and third-party consents or waivers	摆鈼庐	摆鈼庐
A-12	Establish rolling-closing acceptance and allocation rules	摆鈼庐	摆鈼庐

Phase 2 鈥� Economic, Conversion and Downside Modeling

ID	Control item	Owner	Status / evidence
M-01	Reconcile charter authorization, securities ledger and cap table	摆鈼庐	摆鈼庐
M-02	Inventory all convertibles, warrants, options, promises and pool assumptions	摆鈼庐	摆鈼庐
M-03	Confirm interest convention, compounding, accrual start and treatment at conversion	摆鈼庐	摆鈼庐
M-04	Model qualified financing below, at and above cap	摆鈼庐	摆鈼庐
M-05	Model cap-only, discount-only and lower-of outcomes	摆鈼庐	摆鈼庐
M-06	Model conversion of principal versus principal plus accrued interest	摆鈼庐	摆鈼庐
M-07	Model non-qualified financing and holder/company election procedures	摆鈼庐	摆鈼庐
M-08	Model maturity repayment, extension and conversion alternatives	摆鈼庐	摆鈼庐
M-09	Model change of control with senior debt, escrow, earnout and mixed consideration	摆鈼庐	摆鈼庐
M-10	Model insolvency and liquidation priority without assuming full recovery	摆鈼庐	摆鈼庐
M-11	Model target and maximum raises and founder dilution	摆鈼庐	摆鈼庐
M-12	Independently review formulas, rounding and model-to-document definitions	摆鈼庐	摆鈼庐

Phase 3 鈥� Lending, Usury, Tax and Priority Review

ID	Control item	Owner	Status / evidence
U-01	Identify Company, lender, governing-law and performance jurisdictions	摆鈼庐	摆鈼庐
U-02	Analyze interest, fees, discount, default rate, compounding and extension under applicable usury rules	摆鈼庐	摆鈼庐
U-03	Analyze lending-license, commercial-finance disclosure and collection requirements	摆鈼庐	摆鈼庐
U-04	Review choice-of-law and savings clause; do not rely on either without analysis	摆鈼庐	摆鈼庐
U-05	Assess original issue discount, stated interest, conversion and reporting tax issues	摆鈼庐	摆鈼庐
U-06	Determine withholding and tax-form requirements for foreign or exempt holders	摆鈼庐	摆鈼庐
U-07	Search existing liens and review negative pledges and permitted debt baskets	摆鈼庐	摆鈼庐
U-08	If secured, complete collateral, attachment, perfection and priority plan	摆鈼庐	摆鈼庐
U-09	If subordinated, negotiate payment blockage, turnover, standstill and amendment controls	摆鈼庐	摆鈼庐
U-10	Reconcile note default/remedies with NPA, security and intercreditor documents	摆鈼庐	摆鈼庐

Phase 4 鈥� Securities-Law, Communications and Intermediaries

ID	Control item	Owner	Status / evidence
S-01	Select federal exemption and document basis with securities counsel	摆鈼庐	摆鈼庐
S-02	Inventory prior and concurrent offerings for integration	摆鈼庐	摆鈼庐
S-03	Review websites, demo days, accelerators, social posts, press and investor blasts	摆鈼庐	摆鈼庐
S-04	Adopt solicitation protocol consistent with Rule 506(b), 506(c) or selected path	摆鈼庐	摆鈼庐
S-05	Determine accredited status and, for 506(c), reasonable verification method	摆鈼庐	摆鈼庐
S-06	Determine disclosure package and anti-fraud controls	摆鈼庐	摆鈼庐
S-07	Complete bad-actor review and preserve evidence	摆鈼庐	摆鈼庐
S-08	Identify state notices, fees and consent-to-service forms by Investor	摆鈼庐	摆鈼庐
S-09	Calendar Form D and amendments from actual first sale	摆鈼庐	摆鈼庐
S-10	Review legends, transfer restrictions and conversion-share status	摆鈼庐	摆鈼庐
S-11	List all introducers, solicitors, advisers and compensation	摆鈼庐	摆鈼庐
S-12	Resolve broker-dealer or finder issues before any promise or payment	摆鈼庐	摆鈼庐

Phase 5 鈥� Document Assembly and Consistency

ID	Control item	Owner	Status / evidence
D-01	Freeze approved NPA and note with version/hash	摆鈼庐	摆鈼庐
D-02	Reconcile principal, interest, maturity, cap, discount and threshold across documents	摆鈼庐	摆鈼庐
D-03	Reconcile qualified-financing, non-qualified, maturity and exit conversion formulas	摆鈼庐	摆鈼庐
D-04	Reconcile events of default, cure, acceleration, amendments and waivers	摆鈼庐	摆鈼庐
D-05	Reconcile prepayment, pro rata payment and holder-consent mechanics	摆鈼庐	摆鈼庐
D-06	Reconcile ranking, security, negative pledge and subordination terms	摆鈼庐	摆鈼庐
D-07	Confirm Company and purchaser representations and disclosure schedules	摆鈼庐	摆鈼庐
D-08	Confirm holder-agent or requisite-holder mechanics and conflicts	摆鈼庐	摆鈼庐
D-09	Inventory MFN, pro rata, information, observer, consent and expense side rights	摆鈼庐	摆鈼庐
D-10	Test side-letter terms against NPA amendment and equal-treatment provisions	摆鈼庐	摆鈼庐
D-11	Verify signature blocks, entity names, capacities and notice addresses	摆鈼庐	摆鈼庐
D-12	Log every departure from approved forms with materiality and approval	摆鈼庐	摆鈼庐

Phase 6 鈥� Investor and Funds Integrity

ID	Control item	Owner	Status / evidence
I-01	Verify purchaser exact legal name, formation, good standing and authority	摆鈼庐	摆鈼庐
I-02	Obtain complete, current investor questionnaire	摆鈼庐	摆鈼庐
I-03	Complete beneficial-owner and control-person review	摆鈼庐	摆鈼庐
I-04	Complete sanctions and restricted-party screening	摆鈼庐	摆鈼庐
I-05	Review source-of-funds and wire-sender identity	摆鈼庐	摆鈼庐
I-06	Resolve affiliate, nominee, special-purpose vehicle or trust investment structure	摆鈼庐	摆鈼庐
I-07	Confirm ERISA, tax-exempt, foreign and investment-company issues if implicated	摆鈼庐	摆鈼庐
I-08	Approve allocation and avoid unauthorized preferential terms	摆鈼庐	摆鈼庐
I-09	Securely issue and independently verify wiring instructions	摆鈼庐	摆鈼庐
I-10	Establish rejected, excess, late and unmatched funds procedure	摆鈼庐	摆鈼庐

Phase 7 鈥� Pre-Closing and Closing Day

ID	Control item	Owner	Status / evidence
C-01	Confirm Board and all third-party approvals remain effective	摆鈼庐	摆鈼庐
C-02	Confirm no new debt, lien, capitalization or legal development changes analysis	摆鈼庐	摆鈼庐
C-03	Complete purchaser conditions, questionnaires and legal checks	摆鈼庐	摆鈼庐
C-04	Compare final documents to approved hash and variance log	摆鈼庐	摆鈼庐
C-05	Confirm signatures and entity authority	摆鈼庐	摆鈼庐
C-06	Confirm cleared funds and match purchaser, amount and sender	摆鈼庐	摆鈼庐
C-07	Obtain Company acceptance and countersignature	摆鈼庐	摆鈼庐
C-08	Assign note ID and effective date/time	摆鈼庐	摆鈼庐
C-09	Deliver executed NPA joinder, note and side letter securely	摆鈼庐	摆鈼庐
C-10	Post note register, cap-table and accounting entries	摆鈼庐	摆鈼庐
C-11	Sign officer closing certificate and record exceptions	摆鈼庐	摆鈼庐
C-12	Calculate closing and aggregate principal versus authority	摆鈼庐	摆鈼庐

Phase 8 鈥� Post-Closing Administration

ID	Control item	Owner	Status / evidence
P-01	Reconcile documents, wires, note register, cap table and general ledger	摆鈼庐	摆鈼庐
P-02	Issue closing memorandum and updated debt/capitalization summary	摆鈼庐	摆鈼庐
P-03	File Form D and state notices; preserve confirmations	摆鈼庐	摆鈼庐
P-04	Record side rights and assign continuing obligations	摆鈼庐	摆鈼庐
P-05	Calendar interest accrual, reporting, conversion and maturity milestones	摆鈼庐	摆鈼庐
P-06	Retain tax forms, withholding instructions and reporting responsibility	摆鈼庐	摆鈼庐
P-07	If secured, verify every filing, control or possession step and continuation date	摆鈼庐	摆鈼庐
P-08	If subordinated, deliver notices and preserve acknowledgments	摆鈼庐	摆鈼庐
P-09	Report proceeds, principal, accrued interest and remaining authority to Board	摆鈼庐	摆鈼庐
P-10	Restrict investor and beneficial-owner evidence to approved users	摆鈼庐	摆鈼庐
P-11	Return rejected/excess funds and preserve evidence	摆鈼庐	摆鈼庐
P-12	Close open items or escalate overdue items with risk statement	摆鈼庐	摆鈼庐

Phase 9 鈥� Maturity, Conversion and Exit Readiness

ID	Control item	Owner	Status / evidence
R-01	Reconcile principal and interest at least quarterly	摆鈼庐	摆鈼庐
R-02	Give Board maturity forecast at [180/120/90/60/30]-day milestones	摆鈼庐	摆鈼庐
R-03	Before extension, refresh liquidity, usury, tax, amendment and consent analysis	摆鈼庐	摆鈼庐
R-04	Before priced round, prepare holder-by-holder conversion schedule	摆鈼庐	摆鈼庐
R-05	Reconcile conversion documents, charter series, joinders and share reservation	摆鈼庐	摆鈼庐
R-06	Deliver calculation and election notices under instrument timelines	摆鈼庐	摆鈼庐
R-07	Before exit, prepare payment/conversion waterfall including contingent value	摆鈼庐	摆鈼庐
R-08	Before repayment, test pro rata, prepayment, subordination and restricted-payment terms	摆鈼庐	摆鈼庐
R-09	Obtain surrender/cancellation and update note register after conversion or payment	摆鈼庐	摆鈼庐
R-10	Preserve calculation, approvals, holder actions and final capitalization evidence	摆鈼庐	摆鈼庐

Stop-Work Matrix

Trigger	Immediate response	Required decision
Possible usury or licensing issue	Stop issuance/payment and escalate	Jurisdiction-specific counsel conclusion
Existing lien or negative-pledge conflict	Stop affected closing	Consent, intercreditor or revised structure
Public solicitation under presumed 506(b)	Pause offers	Exemption reassessment
Transaction-based finder compensation	Promise/pay nothing	Broker-dealer analysis and approval
Cap-table or debt-register mismatch	Stop and reconcile	Corrected record and Board notice
Wire sender differs from purchaser	Quarantine/return funds	Identity and source-of-funds disposition
Material document variance	Do not countersign	Board or delegated approval
Maturity within 120 days without plan	Escalate to Board	Repay, extend, convert or restructure plan

Interest and Note Register

Holder	Note ID	Issue date	Original principal	Rate / method	Accrued interest	Maturity	Status
摆鈼庐	摆鈼庐	摆鈼庐	摆鈼庐	摆鈼庐	摆鈼庐	摆鈼庐	摆鈼庐

Closing Memorandum

Field	Closing record
Date/time/time zone	摆鈼庐
NPA/note version and hashes	摆鈼庐
Purchaser / principal / note IDs	[SCHEDULE]
Gross proceeds / matched funds	摆鈼庐
Aggregate principal / remaining authority	摆鈼庐
Side letters / security / subordination	摆鈼庐
Exemption and solicitation record	摆鈼庐
Filing and maturity calendar	摆鈼庐
Exceptions / post-closing items	摆鈼庐
Officer certificate	[LINK]

Three-Pass Quality Review

Pass One 鈥� Legal and Structural

Confirm authority, instrument consistency, offering exemption, lending/usury analysis and priority.
Confirm state and holder-specific requirements have current owners.
Confirm no checklist notation purports to cure a missing definitive term.

Pass Two 鈥� Economics and Founder Outcomes

Re-run interest, conversion, maturity, change-of-control and insolvency models.
Test target and maximum raises and all outstanding convertibles together.
Surface holder rights that can constrain later financing or M&A.

Pass Three 鈥� Evidence and Administration

Reconcile documents, funds, note IDs, register, cap table, accounting and approvals.
Test the calendar at closing, quarterly administration, conversion and maturity.
Confirm a named person鈥攏ot 鈥渢he Company鈥濃€攐wns every remaining obligation.

Website Posting README 鈥� Not Part of the Checklist

What this resource does. This checklist manages a founder company’s convertible-note financing from architecture through maturity, conversion or repayment. It gives equal attention to closing and the long administrative tail.

Prompt to complete the form. 鈥淎ct as a startup-finance closing manager working under qualified counsel. Convert EF-085 into a matter checklist from verified documents. Assign an owner, deadline, status and evidence link to every applicable row. Produce a blockers list, interest/note register, document consistency report, security/subordination workstream, filing calendar, conversion model checklist, maturity plan and post-closing reconciliation. Do not invent interest accruals, legal exemptions, usury conclusions, lien priority, investor status or approvals. Flag every jurisdiction-specific conclusion for a lawyer.鈥�

Required human review. Company counsel, securities counsel, finance/accounting, tax counsel when material, jurisdiction-specific lending/usury counsel and secured-transactions or bankruptcy counsel when priority or collateral is involved.

Originality boundary. This is clean-room original drafting. It contains no publisher checklist text, annotation, marking, branding or proprietary commentary.

Posting instructions. Publish the HTML as an educational process tool and link the Word practitioner master. Preserve the stop-work matrix and not-execution-ready warning. Never post matter-specific investor names, financial data, banking instructions or evidence links.

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