This article will walk you through the process of generating a Bridge Note (or Convertible Note) in Shoobx. To learn more about Bridge Notes and how they work, visit this article.
Please note that this article specifically covers the "Create New Bridge Note" path of the Bridge Note workflow, not the upload path.
Creating Bridge Notes in Shoobx
You'll find the "Bridge Note" workflow under the "Financing" section of workflows. The workflow will lead you through the process of creating the documents and completing the financing. Here’s what will happen:
- You'll indicate whether you want to create a Term Sheet for approval before the other documents
- Enter the Note terms and generate financing documents (e.g. the Note Purchase Agreement, a Form of Note that will be used for each investor, board and stockholder approvals).
- If selected, add purchasers and solicit approval for the Term Sheet.
- Review the Representations and Warranties from the Note Purchase Agreement, and add any information that will populate your Disclosure Schedule.
- Add purchaser(s).
- Upload Subordination Agreements, if applicable.
- Include a Certificate of Good Standing (which can be obtained through your lawyer or your registered agent).
- Add bank wire information for your company.
- Solicit approval from the Board of Directors and if applicable, stockholders. Please note that you can (a) upload an executed consent, (b) create a new board consent, or (c) upload a consent that still needs signatures, depending upon your specific needs.
- Solicit signatures on the appropriate financing documents from the company representative and each purchaser.
- Close the financing.
Who can invest using a Bridge Note?
Only Accredited Investors can participate in a Bridge Note financing on Shoobx. Accredited Investors can include individuals and investment firms.
My investors aren’t on Shoobx. Is that ok?
Of course! Investors who are new to Shoobx will receive an email inviting them to set up their Shoobx account and then review and sign their documents. If your round includes existing investors who already have access to Shoobx, they'll get an email to notify them that the financing documents are awaiting their approval.
Do I need help from my counsel?
All financing events should involve guidance from outside counsel. Your counsel involvement settings will determine whether your note financing documents will automatically go to your attorney for review, or whether you can choose to send them.