How Should a Startup Amend Convertible Notes When Noteholders Have Different Maturity Dates?

When convertible notes have different maturity dates, amend each note under its own governing agreement and consent requirements. A blanket amendment is effective only when all affected notes are governed by the same purchase agreement with a valid majority-in-interest provision. Start with a note-by-note audit of maturity dates, default status, governing documents, and required approvals so no unresolved note delays your next financing.

If your company has issued convertible notes across multiple tranches, you likely have a stack with staggered maturity dates. That means some notes may be months from maturity, some may be days away, and some may already be past due. Each situation requires a different response. Understanding the convertible note overhang risks that affect your next raise is the starting point before you attempt any amendment process.

Why Staggered Maturity Dates Create an Amendment Coordination Problem

A convertible note is a bilateral contract between the company and one noteholder. When you issued notes across multiple tranches, each note was likely issued under its own note purchase agreement. That agreement controls the amendment process for that note.

This is the core problem with staggered maturity dates. Each note has its own:

• Maturity date
• Interest rate and accrual method
• Conversion discount and cap
• Amendment consent requirement
• Default and cure provision

When founders try to extend all notes at once, they often apply the amendment process from one note purchase agreement to the entire stack. That works only if all notes were issued under the same agreement with a majority-in-interest consent clause that covers the full group. In most early-stage stacks, that is not the case.

The practical result: You may successfully extend five notes and leave two in technical default without realizing it. Those two become a diligence problem at your next raise.

The Three Maturity Scenarios

Your amendment approach depends on where each note sits relative to its maturity date. There are three distinct scenarios, and each requires a different action.

Notes Not Yet Due

These are the easiest to amend. The note is still performing. The company is not in default. You have time to negotiate terms with the noteholder and execute a written amendment before the maturity date arrives.

For notes not yet due, the amendment typically covers:

• Extended maturity date
• Any change to interest rate or accrual
• Updated conversion terms if applicable

The board must authorize the amendment by resolution. The noteholder must sign an amendment agreement. The cap table must be updated to reflect the new terms.

Notes at or Near Maturity

These require immediate action. A note that matures in 30 days or fewer needs a signed amendment before the maturity date passes. If the date passes without an extension or conversion, the note is in default.

Do not assume a verbal agreement or email exchange is enough. The amendment must be in writing, signed by both parties, and authorized by the board before maturity.

Notes Already Past Maturity

A past-maturity note is already in default. This is the most legally sensitive scenario. The noteholder has the right to demand repayment of principal plus accrued interest. The company cannot unilaterally extend a note that is already in default. Convertible note indentures filed with the SEC define failure to pay principal on the stated maturity date as an immediate event of default, with no cure period for principal non-payment.

Two paths exist:

1. Negotiate a written extension. The noteholder agrees to waive the default and extend the maturity date. This requires a signed amendment and a board resolution. The noteholder may ask for improved conversion terms in exchange.
2. Repay the note. If the noteholder will not extend, the company must repay principal plus accrued interest. If the company cannot repay, the default remains on the books until resolved.

A past-maturity note can still be amended if the noteholder agrees. There is no legal bar to amending a defaulted note. The issue is that the noteholder now holds more leverage. Review how cap table issues like unresolved note defaults affect institutional diligence before entering that negotiation.

Consent Mechanics: Per-Note vs. Majority-in-Interest

Before you draft any amendment, read the amendment section of each note purchase agreement. It will tell you one of two things.

Per-note consent: The amendment requires the signature of that specific noteholder. This is common when notes were issued under separate purchase agreements, each negotiated individually. You cannot use the consent of other noteholders to bind this one.

Majority-in-interest consent: The amendment requires consent from holders of more than 50% of the outstanding principal across all notes issued under that agreement. If a group of noteholders meets that threshold, the amendment binds the minority holders in the group.

The key word is "group." A majority-in-interest clause only applies to the notes governed by that specific purchase agreement. If a noteholder signed a different purchase agreement, they are not in the same group. Their consent is governed by their own document. The same principle applies to side letters and investor accommodations granted outside the main financing documents: each agreement creates its own rights universe, and what applies to one noteholder does not automatically extend to another. Founders who have granted off-document accommodations alongside their note issuances should review how side letter provisions interact with financing document consent requirements before drafting any amendment.

A majority-in-interest clause does not give you the right to bind noteholders across different purchase agreements. Each agreement creates its own consent universe.

This is where founders make the most common mistake. A majority-in-interest clause covers only the notes issued under that agreement. For notes issued under separate agreements, you need individual consent from each noteholder.

The entity mechanics behind each noteholder position also affect who has authority to sign. For a deeper look at how noteholder entity structures affect amendment authority, see this article on chain-of-title and noteholder entity mechanics in convertible note stacks.

How to Sequence and Document Each Amendment

Start with a note-by-note audit. List every outstanding note, its maturity date, its governing purchase agreement, and its consent requirement. Group notes by purchase agreement, then by maturity date within each group.

Work in this order:

1. Past-maturity notes first. These are already in default. Resolve them before touching anything else.
2. Near-maturity notes second. Any note maturing within 60 days needs a signed amendment before the deadline.
3. Future-maturity notes last. These can be addressed on a normal timeline.

For each amendment, you need three documents:

Do not skip the board resolution, even if the amendment feels routine. Diligence teams will ask for it. A signed amendment without a board resolution is an incomplete record. Standard note purchase agreements filed with the SEC confirm that board approval is a required closing condition for any amendment that changes a maturity date or conversion term.

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What Diligence Teams Find When Amendments Were Handled Inconsistently

When a priced round, acquisition, or institutional review triggers diligence, counsel will pull every convertible note and every amendment. They are looking for four things:

• A signed amendment for every note that was extended
• A board resolution for each amendment
• No gap between the original maturity date and the amendment effective date
• Consistent terms across notes issued under the same purchase agreement

If any note was extended by email, verbal agreement, or a single omnibus amendment that did not apply to all notes in a group, the record is incomplete. Counsel will flag it. The lead investor or acquirer will ask for an explanation. That explanation takes time and creates friction at the worst possible moment.

Unresolved past-maturity notes are the most serious finding. A note in default with no amendment and no repayment record signals that the company either did not track its obligations or could not meet them. Both readings damage credibility. Counsel conducting acquisition diligence applies the same scrutiny to convertible note records as they do to litigation and governance documents. Founders preparing for a sale should review what the 47-document M&A diligence checklist includes for debt and equity instruments to understand exactly where note amendment gaps appear in a buyer's review.

Anonymized Proof Point

A founder preparing for a Series B discovered during pre-diligence that three convertible notes from an early seed tranche had passed their maturity dates 14 months earlier. The company had no record of any amendment, no board resolutions, and no repayment history for those notes. Counsel also found that one of the noteholders had signed a separate purchase agreement from the other two, meaning a single group amendment would not have been sufficient even if one had been attempted. This is the same pattern that surfaces in cap table litigation reviews when ownership records are incomplete: gaps in documentation become trust problems, not just legal ones. The notes had been issued under separate purchase agreements. No amendments had been signed. The noteholders had not demanded repayment, so the founder assumed the issue was dormant. It was not. Counsel required signed amendments with default waivers from each noteholder before the round could proceed. Two noteholders used the opportunity to negotiate improved conversion terms. The process added six weeks to the closing timeline.

The lesson: a noteholder who does not demand repayment is not waiving their rights. The default stays on the record until it is formally resolved.

Founders managing note stacks ahead of a raise should also review how consent rights across the cap table interact with institutional investor requirements before starting the amendment process.

Working Through a Note Stack Before Your Next Raise

Staggered maturity dates are a documentation problem before they become a legal one. The fix is methodical: audit each note, identify the governing agreement, confirm the consent requirement, and execute a separate amendment for each note that needs one.

IRC Partners works with founders and CFOs to identify structural issues in outstanding note stacks before they surface in diligence. If your cap table includes notes from multiple tranches with different maturity dates, getting the amendment process right before outreach begins protects the timeline and the terms of your next raise.

Frequently Asked Questions

Can one amendment extend all convertible notes in a stack at the same time?

Only if all notes were issued under the same purchase agreement and that agreement includes a majority-in-interest consent clause covering the full group. If notes were issued under separate agreements, each note requires its own amendment. Applying a single amendment to notes governed by different agreements creates consent gaps that are not legally effective and will surface in diligence.

What happens if a convertible note matures and the company does nothing?

The note goes into default. The noteholder gains the right to demand full repayment of principal plus accrued interest. The default does not disappear because the noteholder stays quiet. It remains on the company's books as an unresolved obligation until the note is formally amended, repaid, or converted. A dormant default is still a default when diligence counsel reviews the cap table.

Does a majority-in-interest clause let you bind a noteholder who signed a different purchase agreement?

No. A majority-in-interest clause creates a consent threshold within the group of noteholders covered by that specific purchase agreement. A noteholder who signed a separate purchase agreement is outside that group. Their consent is governed entirely by their own document. Founders who misread this distinction end up with amendments that do not legally bind every noteholder they intended to cover.

What board authorization is required to amend a convertible note?

Each amendment requires a separate board resolution authorizing the company to enter into that specific amendment. The resolution should identify the noteholder, the original note date, and the material terms being changed. A blanket resolution authorizing "all note amendments" is generally not sufficient and will be questioned in diligence. Counsel for the lead investor or acquirer will want to see a resolution tied to each individual amendment.

Can a past-maturity note be amended instead of repaid?

Yes, if the noteholder agrees. There is no legal rule that a defaulted note must be repaid rather than amended. The noteholder may agree to waive the default and extend the maturity date in exchange for revised conversion terms or other concessions. The amendment must include a written waiver of the existing default. Without that waiver, the default remains even if a new maturity date is set.

How should the cap table reflect a convertible note amendment?

The cap table entry for each note should be updated to show the new maturity date, any change to the principal amount if interest was capitalized, and any revised conversion terms. The amendment agreement and board resolution should be stored in the company's data room alongside the original note and purchase agreement. Diligence teams will trace each note from issuance through any amendments to confirm the record is complete.

What is the difference between amending a single note and amending a note stack?

Amending a single note is a bilateral process between the company and one noteholder. Amending a note stack means running that bilateral process separately for each note in the stack. There is no collective amendment mechanism that applies across all notes unless all notes share the same governing purchase agreement with a majority-in-interest provision. A stack with five notes under five separate agreements requires five separate amendment processes, five board resolutions, and five cap table updates.

Continue reading this series:

• Convertible Note Overhangs: Why Unresolved Notes from Your Seed Round Are a Series B Time Bomb
• Cap Table Issues That Kill a Series B Before the Lead Investor Reads Your Deck
• How Consent Rights Turn Your Cap Table into a Governance Problem Before Series B

IRC Partners advises operators raising $5M to $250M of institutional capital on structure, positioning, and round architecture. We take seven strategic partners per quarter. No placement agent model. No success-only theater. Capital is raised on the strength of how the deal is built. If you want your current raise reviewed before it reaches the market and silently fails, apply here.