Document background
The Convertible Debt Agreement is a sophisticated financing instrument used when companies seek to raise capital while deferring equity valuation discussions. This document, governed by Irish law, provides a framework for investors to initially lend money to a company with the right to convert that debt into equity shares at a later date, typically during a qualifying financing round or exit event. It is particularly valuable for early-stage companies and scale-ups that need immediate funding but want to postpone complex valuation negotiations. The agreement includes essential provisions for protecting both investor and company interests, incorporating specific requirements under Irish financial regulations and company law, and typically features conversion triggers, valuation caps, and discount mechanisms.
