What happened Shares of Porch Group (NASDAQ: PRCH) fell sharply on Monday morning. The cloud-based provider of homebuyer and homeowner services stumbled out of the gate, falling as much as 16.3% in early trading. As of 2:23 p.m. EDT, the shares were still down 15.7% compared with Friday's closing price. Investors seemed concerned as Porch Group announced plans to raise capital by selling convertible notes. Image source: Getty Images. So what The company said it would offer $350 million in convertible senior notes due in 2026 in a private sale to "qualified institutional buyers." Additionally, Porch Group said the buyers will have the option to purchase up to an additional $52.5 million in notes within 30 days. Holders of these obligations will have the option to convert them to cash, common stock, or a combination of the two. The potential for dilution is no doubt on the minds of current shareholders, but the news isn't all bad. Porch will enter into privately negotiated "capped call" transactions with one or more of the buyers. The purpose of these deals is to "reduce the potential dilution to the common stock" that can occur and offset the amount of any cash payments that Porch Group will be required to pay out to the holders of the notes. Now what The company will use some of the proceeds from the offering to pay for the capped call, with the remainder to pay off Porch Group's term loan and for the oft-cited "general corporate purposes." This fundraising shouldn't be too much of a surprise to those that have been paying attention. Porch has made no secret of its growth-by-acquisition strategy, adding two new companies to its stable just last week. With that as a backdrop, this likely won't be the last time Porch Group goes back to the well to raise money. 10 stocks we like better than Porch Group Inc.When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Porch Group Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of August 9, 2021 Danny Vena has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source