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A Convertible Agreement lets early-stage investors fund Indonesian startups through loans that can later turn into company shares. It's a popular financing tool that bridges the gap between initial funding and formal equity rounds, giving both parties flexibility while the company grows.

Under Indonesian investment laws, these agreements typically specify a future valuation cap, discount rate, and trigger events for conversion. They help startups access quick capital without setting a firm company value right away, while giving investors the potential upside of equity ownership when certain milestones are reached. Most Indonesian convertible agreements follow OJK regulations and require notarial deeds for enforcement.

Use a Convertible Agreement when your Indonesian startup needs quick funding but isn't ready to set a firm company valuation. This flexible tool works especially well during seed rounds or bridge financing, letting you access capital faster than traditional equity deals while postponing complex valuation discussions.

The agreement makes sense when you're growing rapidly and expect a significant increase in company value before your next major funding round. It appeals to angel investors and early-stage venture funds who want potential equity upside without immediate shareholding complications. Just remember that OJK regulations require proper documentation and notarization for these instruments to be legally binding.

• Basic Convertible Note: The simplest form used by Indonesian startups, featuring standard interest rates and maturity dates with equity conversion options
• SAFE Agreement: A simplified version without interest or maturity dates, popular among tech startups and accelerators in Jakarta's ecosystem
• Bridge Note: Specifically designed for short-term funding needs with faster conversion triggers and higher interest rates
• Strategic Investor Note: Contains additional rights like board seats or veto powers, commonly used with corporate investors in Indonesia
• Hybrid Convertible: Combines elements of debt and equity, offering both fixed returns and conversion options under OJK guidelines

• Startup Founders: Sign and negotiate Convertible Agreements to secure early-stage funding without immediate equity dilution
• Angel Investors: Provide capital through these instruments, typically ranging from IDR 500 million to 5 billion
• Corporate Lawyers: Draft and review agreements to ensure compliance with OJK regulations and protect client interests
• Venture Capital Firms: Use convertible instruments for bridge financing between larger equity rounds
• Public Notaries: Execute and register these agreements as required by Indonesian investment laws
• Company Directors: Authorize and oversee the conversion process when trigger events occur

• Company Details: Gather complete corporate information, including PT registration number and shareholding structure
• Investment Terms: Define investment amount, valuation cap, discount rate, and interest rate (if applicable)
• Conversion Triggers: Specify events that will trigger conversion, like qualified financing rounds or IPO
• Due Diligence: Collect financial statements, business plan, and corporate approvals
• Legal Requirements: Ensure compliance with OJK regulations and prepare for notarial deed execution
• Timeline Planning: Set clear maturity dates and establish milestones for potential conversion events
• Document Generation: Use our platform to create a legally compliant agreement tailored to Indonesian law

• Party Identification: Full legal names and details of investor and company, including registration numbers
• Investment Terms: Principal amount, valuation cap, and discount rate clearly stated in IDR
• Conversion Mechanics: Detailed triggers, calculation methods, and share class specifications
• Interest Provisions: Rate, calculation method, and payment terms if applicable
• Maturity Terms: Clear date and repayment obligations
• Rights and Obligations: Information rights, pre-emptive rights, and transfer restrictions
• OJK Compliance: Required regulatory disclosures and investment restrictions
• Governing Law: Explicit reference to Indonesian law and jurisdiction

A Convertible Agreement differs significantly from a Bond Purchase Agreement in several key ways, though both are investment instruments in Indonesia's financial landscape. The main distinction lies in their structure and flexibility.

• Investment Nature: Convertible Agreements offer the potential to convert into equity, while Bond Purchase Agreements remain pure debt instruments with fixed repayment terms
• Valuation Requirements: Convertible Agreements can delay valuation discussions, but Bond Purchase Agreements need immediate fixed values
• Regulatory Framework: Convertible Agreements fall under OJK's startup financing rules, while Bond Purchase Agreement must comply with stricter corporate bond regulations
• Target Users: Early-stage startups typically use Convertible Agreements, whereas established companies issue bonds
• Risk Profile: Convertible Agreements carry higher risk but offer potential equity upside, while bonds provide fixed returns with lower risk