Investment Terms and Conditions

1. Loans will have two-year maturities with no repayment of principal or interest for two years (i.e., a balloon payment of principal and interest is due in 24 months). Pre-payment must be approved by the Fund’s Investment Committee.

2. The interest rate will accrue at an 8% annual rate.

3. The company and its owners must sign a “CT Presence” clause. Failure to maintain a CT presence will require repayment at 1.5 times the outstanding balance. You will be asked to verify residency of management and paid employees prior to funding.

4. If the company is sold prior to the repayment or conversion of the note, repayment of the debt will be at 1.5 times the outstanding balance.

5. The Fund will be granted an option to convert the note into equity in the next equity round of financing of at least $500,000. In the event of an equity round, the Fund can choose to participate and will convert its debt to equity at a 25% discount to the pricing of the equity round.

6. No funds may be used for company expenditures made prior to the investment or for distribution to any founder, principal or owner. This includes repayment of prior loans, capital contributions, investments, or payments or distribution to any founder, principal, or owner of the company.

7. Proceeds are to be used in accordance with agreed upon activities that yield the highest value to the company’s development. For example, funds can be used to pay unaffiliated third parties for startup expenses such as accounting, legal or intellectual property development, prototype development, business plan assistance and development, technology reviews, assessment or development, market analysis or market entry strategy development, and hiring resources, consultants, or employees. The Fund reserves the sole right to approve the use of funds. Allocation of funds are conditional upon compliance with approved milestones and expenses.