Document background
The Convertible Debt Agreement is a crucial financing instrument commonly used by growing companies in Austria seeking to raise capital while deferring company valuation. This document is particularly relevant for startups and scale-ups in their early to growth stages, providing a bridge between funding rounds or serving as an alternative to immediate equity investment. The agreement must comply with Austrian corporate law, particularly the Stock Corporation Act (AktG) and Limited Liability Companies Act (GmbHG), while addressing key commercial terms including interest rates, maturity dates, conversion triggers, and valuation caps. It's designed to protect both the company's and investor's interests while providing flexibility in future financing scenarios. The document typically comes into play during interim financing rounds, bridge financing, or when companies need quick access to capital while negotiating larger equity rounds.
