The bottom line is that you should be sure to research both the federal and your state’s securities requirements before entering a promissory note or other investment instrument to ensure that it will not be deemed a security. That is, unless you don’t mind complying with the securities laws. If you do decide to enter a note or other transaction that will likely be deemed a security, or are uncertain, be sure to consult with a competent securities attorney in your state. Federal and state securities laws can be VERY complex. Many exemptions are available, particularly for small businesses raising capital from just a few competent and credible investors and especially if they are all intra-state transactions that don’t involve a lot of money (i.e. involving investors in just your state and not multiple states). But it can be very tough and risky to navigate the criteria and requirements for the exemptions all on your own.