[mattmaroon]

Now that I reread that, you're totally wrong. Angels are individual investors. They can and often do participate in equity rounds. They often contribute the entire amount. You can have an angel-funded series A. VCs could also do a convertible. It's called venture debt and it's rare but it happens.

No company that I've ever heard of specifies in their Articles what amount forces a future round to be equity rather than debt. It's all up to the company and investors. If your lawyers told you all of that stuff, seek new representation.