Original practitioner master · Prepared 29 September 2026 · 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.
“Complete” 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	[●]
Company counsel / finance owner	[●] / [●]
NPA / note / side-letter versions	[●]
Target / maximum / minimum principal	[●] / [●] / [●]
Interest / compounding / day count	[●] / [●] / [●]
Maturity / extension mechanics	[●] / [●]
Cap / discount / qualified-financing threshold	[●] / [●] / [●]
Prepayment / change-of-control treatment	[●] / [●]
Ranking / security / subordination	[●] / [●] / [●]
Exemption / solicitation policy	[●] / [●]
First close / outside date	[●] / [●]
Form D / state-notice owner	[●] / [●]
Note-register owner	[●]

Phase 1 — Financing Architecture and Authority

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

Phase 2 — Economic, Conversion and Downside Modeling

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

Phase 3 — Lending, Usury, Tax and Priority Review

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

Phase 4 — Securities-Law, Communications and Intermediaries

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

Phase 5 — Document Assembly and Consistency

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

Phase 6 — Investor and Funds Integrity

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

Phase 7 — Pre-Closing and Closing Day

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

Phase 8 — Post-Closing Administration

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

Phase 9 — Maturity, Conversion and Exit Readiness

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

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
[●]	[●]	[●]	[●]	[●]	[●]	[●]	[●]

Closing Memorandum

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

Three-Pass Quality Review

Pass One — 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 — 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 — 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—not “the Company”—owns every remaining obligation.

Website Posting README — 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. “Act 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.”

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.