Document background
The Convertible Note Agreement under Dutch law is primarily used by companies seeking flexible financing solutions, particularly in the growth or pre-Series A stage. This document is essential when a company needs bridge financing but either cannot or prefers not to establish a firm valuation immediately. The agreement details the terms of a loan that can convert into equity, typically triggered by qualified financing rounds, exits, or maturity. Under Dutch law, specific attention is paid to corporate authorization requirements, security rights (if applicable), and registration obligations. The document includes crucial elements such as conversion mechanics, interest calculations, and investor protections, all structured to comply with Dutch civil and corporate law. It's particularly popular among startups and scale-ups as it offers a faster, more cost-effective alternative to straight equity investment while providing investors with potential upside through the conversion feature.
