Can I raise more than my board approved?

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Accepted Answer

The consent that approved your round authorized instruments up to an aggregate amount. Everything signed under that number is properly authorized. An instrument signed above it is not, however willing the investor and however good the news. The fix is simple and should happen before the signing, not after it: the board signs a consent increasing the authorized amount to the new total. What the increase consent does Recites the original approval and the amount it authorized Raises the aggregate amount to the new figure Confirms that everything else in the original consent, including the form of instrument, stays as approved When the instruments themselves need amending Most SAFEs and standalone notes do not state a maximum for the round, so raising the board's ceiling is all it takes. Where notes were sold under a note purchase agreement that caps the total, or where the note's own terms name a maximum, the cap in those documents has to be amended too, which usually means the company and the holders of a majority of the outstanding principal sign a short amendment. Read the note before assuming the board consent is enough. Instruments already signed under the original approval are unaffected by the increase. Their terms, their dates and their holders' rights all stay exactly as they were.

Can I raise more than my board approved?

What the increase consent does

When the instruments themselves need amending

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