Skill

legalcode-convertible-note-review

Review convertible notes and convertible loan notes (CLNs) for founders, investors, and counsel — covering interest accrual and compounding mechanics, maturity and redemption risk, qualified financing definition and threshold, conversion mechanics (discount rate, valuation cap, shadow preferred stock, post-money formula), MFN clause analysis, pro-rata rights, prepayment and subordination provisions, events of default, and amendment consent thresholds. Benchmarks every material term against current market standards (NVCA 2025, Carta Q1 2025, Fenwick/Cooley market data) with dual-perspective framing (founder view and investor view for every economic term). Models cap table dilution from interest accrual and conversion across multiple scenarios. Produces confidence-scored, jurisdiction-aware analysis with COMPLIANT / FLAG / NON-COMPLIANT classification, prioritized redlines, and a Glass Box audit trail. Use when reviewing or negotiating a convertible note, convertible loan note, bridge note, or demand note convertible instrument at any stage (pre-seed through Series A bridge). Jurisdiction-agnostic base with deep tracks for US (Delaware / IRC § 409A) and UK (Companies Act 2006 / SEIS-EIS). Also triggers on: SAFE comparison, shadow preferred mechanics, qualified financing threshold, valuation cap vs. discount analysis, MFN clause triggering, pro-rata side letter, maturity extension mechanics, subordination to senior debt, 409A FMV timing, QSBS eligibility path, EIS/SEIS incompatibility, FEMA constraints on convertible instruments, convertible note overhang, and bridge-to-Series-A scenario planning.