Free Fundraising & Equity generator
KISS-Style Convertible Instrument (Debt or Equity)
A 'Keep It Simple Security' that bundles cap, discount, interest, MFN, and pro-rata rights into one instrument, issued in a debt or an equity version.
What is a KISS-Style Convertible Instrument?
A KISS-Style Convertible Instrument (Debt or Equity) is a 'Keep It Simple Security'. It bundles a cap, a discount, interest, MFN, and pro-rata rights together and is issued as either a debt or an equity version.
Founders who want a single standardized instrument that combines the best of a note and a SAFE (cap, discount, interest, most-favored-nation, and major-investor pro-rata rights) in one clean form, offered in a debt flavor or an equity flavor.
KISS-Style Convertible Instrument template, current for 2026
One instrument with both debt and equity variants, built-in MFN, a major-investor pro-rata right, and a post-money-aware cap. QSBS/holding-period, CTA/BOI, and e-signature notes brought current to 2026.
How HDAi does this differently
Unlike a static form, HDAi runs a guided interview and assembles your KISS-Style Convertible Instrument as you answer. When you want it finished, a licensed Hart David Carson attorney reviews it and tailors it to your facts before you sign. The interview and the first draft are automated. The judgment belongs to an attorney.
What you’ll be asked
A short interview in plain language that asks only what this document needs.
- Which version of this instrument are you issuing? The KISS comes in two flavors. The Debt version accrues interest and has a maturity date (it is a convertible promissory note, with creditor ranking and default remedies). The Equity version has no maturity and no repayment obligation and converts on the next financing. Everything else (cap, discount, MFN, pro-rata) is the same.
- Who is the Company issuing this instrument? The startup raising the money. Use the exact legal entity name as it appears in the certificate of incorporation, since this instrument becomes part of the company's cap table.
- What type of entity is the Company? Most venture-backed startups are Delaware C-corporations. This affects the governing-law defaults and how the conversion securities are described.
- State of incorporation / formation The state whose law governs the Company's existence (e.g., Delaware). Used in the recitals and to describe the entity.
- Who is the Investor (purchaser)? The person or fund putting in the money. Use the full legal name of the individual or entity that will hold this instrument and later receive the conversion shares.
- Is the Investor an individual or an entity (fund, LLC, corporation)? This controls the Investor signature block. An entity signs through an authorized signatory (By / Name / Title); an individual signs personally. Most venture and fund investors are entities.
- Name of the person signing for the Investor entity The individual authorized to sign on behalf of the Investor entity. Appears in the Investor's signature block.
- Title of the Investor's signatory That person's office or role at the Investor entity (e.g., Managing Member, General Partner, Managing Director). Confirms signing authority.
- Purchase amount (the money being invested) The dollar amount the Investor is paying now. This becomes the principal (debt version) or the purchase amount that converts (equity version).
- Issue date of this instrument The effective date the instrument is signed and funded. Interest (debt version) accrues from this date, and the maturity date is measured from it.
- Valuation cap The maximum company valuation at which this money converts into equity, the Investor's reward for investing early. A lower cap means the Investor gets more shares. Enter the pre-money (or agreed) cap in dollars.
- Is the valuation cap a pre-money or post-money cap? This determines whether other converting securities and the option pool dilute the Investor. Post-money caps, now the default, give the Investor a fixed, known ownership percentage; pre-money caps are the older KISS convention. The Company Capitalization definition follows the post-money convention.
- Discount rate (as a percentage, e.g. 20 for 20%) The percentage discount off the next round's price that the Investor gets. A 20% discount means the Investor converts at 80% of the price new investors pay. Enter 0 if there is no discount.
- Annual interest rate (as a percentage) Only for the debt version. The simple annual interest that accrues on the principal until conversion or maturity. The typical range is 2% to 8%. Leave blank for the equity version.
- Default interest bump (extra percentage added on default) Only for the debt version. The additional annual interest that accrues after an Event of Default, on top of the base rate, capped at the maximum rate permitted by law. A common bump is 5%. Leave blank to use 5%.
- Should this note be unsubordinated (rank equally with other unsecured debt) or subordinated? Only for the debt version. Unsubordinated (the default) means the note ranks pari passu with the Company's other general unsecured debt. Subordinated means it ranks behind the Company's Senior Indebtedness and the Investor agrees to sign a reasonable subordination agreement.
- Which state's usury cap applies to the interest? Only for the debt version. The usury savings clause caps interest at the maximum lawful rate of this state. Usually the same as the governing-law state. Confirm the applicable state so any excess interest is reallocated to principal rather than making the note usurious.
- Maturity term (number of months from the issue date) Only for the debt version. How long until the note matures. If no qualified financing has happened by then, the Investor can demand repayment or convert. 18 to 36 months is common.
- Qualified financing threshold (minimum new-money raise that triggers automatic conversion) The size of the next equity round that automatically converts this instrument into that round's preferred stock. Only rounds at or above this dollar amount count as 'qualified.' A common threshold is $1,000,000.
- Include major-investor pro-rata (participation) rights? Pro-rata rights let the Investor keep their ownership percentage by buying their share of future rounds. The KISS grants these to 'Major Investors' above a threshold. This is a signature KISS feature.
- Should the pro-rata right apply to just the next round, or to every future round? One-time rights let the Investor participate only in the next equity financing after the Qualified Financing, then terminate. Ongoing rights let the Investor participate in every subsequent financing. Ongoing rights are more investor-favorable.
- Major Investor threshold (minimum investment to qualify for pro-rata rights) Only Investors who put in at least this amount get pro-rata rights and other 'Major Investor' protections. Often set equal to or below the individual check size. Leave blank to make every Investor a Major Investor.
- Change-of-control payout multiple If the Company is sold or has a change of control before this converts, the Investor is repaid the greater of this multiple of their money or their as-converted value at the cap. Enter the multiple (1 = return of money, 2 = double).
- Governing law (state) The state whose law governs this instrument and where disputes are resolved. Often the state of incorporation (e.g., Delaware) or the Company's principal place of business.
- Company's notice address The full mailing address (and optionally email) where the Company receives official notices under this instrument.
- Investor's notice address The full mailing address (and optionally email) where the Investor receives official notices, distributions, and conversion documents.
- Name of the person signing for the Company The individual authorized to bind the Company (e.g., the CEO or an officer). Appears in the Company's signature block.
- Title of the Company's signatory That person's office (e.g., Chief Executive Officer, President). Confirms signing authority.
- Is the Investor an accredited investor? This instrument is a security sold in a private placement. The representation that the Investor is accredited (as defined under SEC Rule 501) supports the exemption from registration.
Frequently asked
About the KISS-Style Convertible Instrument and how HDAi works.
What is a KISS-Style Convertible Instrument (Debt or Equity)? +
A KISS-Style Convertible Instrument (Debt or Equity) is a 'Keep It Simple Security', an instrument that bundles cap, discount, interest, MFN, and pro-rata rights together and is issued as either a debt or an equity version. Founders use it when they want one standardized instrument that combines the best of a note and a SAFE (cap, discount, interest, most-favored-nation, and major-investor pro-rata rights) in one clean form, in a debt flavor or an equity flavor.
Is HDAi's KISS-Style Convertible Instrument (Debt or Equity) legally binding? +
The KISS-Style Convertible Instrument (Debt or Equity) HDAi generates is a professionally drafted document that becomes binding once it is completed, reviewed, and properly signed. If you want a licensed Hart David Carson attorney to finish it, book a planning call. The firm's flat-fee packages, the Illinois Family Plan and Company Launch, cover the most common needs; for any other draft, an Illinois attorney will tell you on the call what finishing it would involve.
Do I need a lawyer to use this KISS-Style Convertible Instrument (Debt or Equity)? +
You can generate and download the KISS-Style Convertible Instrument (Debt or Equity) in minutes, free of charge. A licensed Hart David Carson attorney can then review it and tailor it to your facts before you sign, which is the part no template can do.
What makes this KISS-Style Convertible Instrument (Debt or Equity) current for 2026? +
It is one instrument with both debt and equity variants, a built-in MFN, a major-investor pro-rata right, and a post-money-aware cap, and its QSBS/holding-period, CTA/BOI, and e-signature notes have been brought current to 2026.
How long does the KISS-Style Convertible Instrument (Debt or Equity) take? +
Estimated time about 15 min (29 questions), depending on how much you already know. The document assembles as you answer. Export it as PDF or Word, or send it to a Hart David Carson attorney for review.
Does this KISS-Style Convertible Instrument (Debt or Equity) work in my state? +
HDAi's interview is state-aware. If you ask an attorney to finish the draft, a licensed Hart David Carson attorney confirms it against your state's requirements before you rely on it. Validity and required formalities vary by state.
Fundraising & Equity
Related generators
Convertible Promissory Note · Series Seed Preferred Term Sheet · Pre-Money SAFE (Legacy Format) · Series Seed Stock Purchase Agreement · All 124 →