Methods and systems for issuing a convertible financial instrument

A network-based system for issuing a convertible financial instrument to a customer for raising capital for an issuing business, the convertible financial instrument structured to generate returns that are based on actual profits and capital gains of the issuing business and not on a pre-determined interest rate, the system comprising:

• a database for storing data relating to the issuing business and relating to the convertible financial instrument including rights and obligations associated with the convertible financial instrument;
• a client system comprising a browser;
• and
• a server system coupled to the database and the client system, the server configured to:
• display information stored in the database on the client system including financial instrument data and business data;
• receive an acknowledgment from the client system that the customer has reviewed the displayed information;
• issue to the customer the convertible financial instrument having a conversion feature and a coupon return using the client system, the convertible financial instrument representing a non-equity ownership interest in the issuing business, the coupon return paid from at least one of profits and capital gains of the issuing business, the convertible financial instrument redeemable at a maturity date at a face value of the convertible financial instrument;
• prompt the customer using the client system to exercise the conversion feature after reaching a conversion date, the conversion feature exercisable to convert the convertible financial instrument into a converted financial instrument representing an equity ownership interest in the issuing business;
• calculate a value for the converted financial instrument based on a predetermined formula and the data stored in the database;
• and
• convert the convertible financial instrument into the converted financial instrument based on the calculated value.

A computer readable storage medium tangibly embodying program instructions for providing a convertible financial instrument for raising capital by an issuing business, the convertible financial instrument structured to generate returns that are based on actual profits and capital gains of the issuing business and not on a predetermined interest rate, the instructions configured to instruct a computer to:

• issue to a customer the convertible financial instrument having a conversion feature and a coupon return, the convertible financial instrument representing a non-equity ownership interest in the issuing business, the coupon return paid from at least one of profits and capital gains of the issuing business, the convertible financial instrument redeemable at a maturity date at a face value of the convertible financial instrument;
• store data relating to the issuing business and the convertible financial instrument in the database;
• prompt the customer to exercise the conversion feature upon reaching a conversion date, the conversion feature exercisable for converting the convertible financial instrument into a converted financial instrument representing an equity ownership interest in the issuing business;
• calculate a value for the converted financial instrument based on a predetermined formula and the data stored in the database;
• and
• convert the convertible financial instrument into the converted financial instrument based on the calculated value.