Typically you would not be selling the convertible note: that second clause is for the case where you sell the company without taking additional outside investment, in which case the convertible note owner participates in that sale as if they had an equity interest.
Angel investments are generally illiquid, modulo "you invested in Facebook or some other company which is so hot there is a secondary market and a term sheet practically causes fusion of surrounding hydrogen atoms."
Comments
Typically you would not be selling the convertible note: that second clause is for the case where you sell the company without taking additional outside investment, in which case the convertible note owner participates in that sale as if they had an equity interest.
Angel investments are generally illiquid, modulo "you invested in Facebook or some other company which is so hot there is a secondary market and a term sheet practically causes fusion of surrounding hydrogen atoms."