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A Convertible Agreement lets early-stage investors fund Filipino startups through a loan that can later turn into company shares. It works like a promise note - investors provide capital now, but instead of getting paid back in cash, they'll receive equity when certain events happen, like a major funding round or IPO.

Under Philippine securities laws, these agreements help startups raise capital without immediately setting a company valuation. Investors typically get better terms than later investors, often through a discount rate or valuation cap. This flexibility makes it popular among angel investors and startup accelerators in Manila's growing tech ecosystem.

Use a Convertible Agreement when your Philippine startup needs quick funding but setting a firm company valuation feels premature. This works especially well during your pre-revenue phase or when rapid growth makes accurate valuation challenging. Many Metro Manila tech startups use these agreements during their seed rounds.

These agreements prove particularly valuable when dealing with angel investors who want to support your venture but prefer deferring complex equity discussions. The agreement's flexibility helps close deals faster than traditional equity rounds, while the Securities and Exchange Commission's regulatory framework provides clear guidelines for both parties.

• Convertible Note Purchase Agreement: Standard startup financing tool with simple terms and quick execution for early-stage funding
• Convertible Loan Stock Agreement: More structured approach used by larger companies, offering interest payments until conversion
• Convertible Debenture Agreement: Secured debt instrument popular among established companies, offering asset-backed security
• Loan Conversion To Equity Agreement: Transforms existing loans into equity, common in debt restructuring
• Convertible Debt Agreement: Basic framework focusing on debt aspects, with flexible conversion terms

• Startup Founders: Sign and manage Convertible Agreements to secure early funding without immediately diluting their ownership or setting firm valuations
• Angel Investors: Provide seed capital through these agreements, often taking advantage of conversion discounts and valuation caps
• Corporate Lawyers: Draft and review agreements to ensure SEC compliance and protect both parties' interests
• Investment Firms: Use these instruments for portfolio companies, particularly in Manila's growing tech sector
• Company Directors: Approve and execute agreements as part of their corporate governance duties
• SEC Officials: Monitor compliance with Philippine securities regulations and investor protection guidelines

• Investment Terms: Determine principal amount, interest rate, maturity date, and conversion discount or valuation cap
• Company Details: Gather corporate documents, SEC registration, and latest financial statements
• Investor Information: Collect investor credentials, proof of funds, and tax identification details
• Trigger Events: Define specific conditions that will prompt conversion to equity
• Conversion Mechanics: Specify share class, price calculation method, and anti-dilution provisions
• Corporate Approvals: Secure board resolutions and necessary stockholder consent
• Documentation Review: Use our platform to generate a compliant agreement template, ensuring all Philippine SEC requirements are met

• Parties Section: Full legal names, addresses, and authorized representatives of company and investor
• Investment Terms: Principal amount, interest rate, maturity date in compliance with Philippine usury laws
• Conversion Rights: Detailed mechanics, timing, and pricing formulas for equity conversion
• Qualifying Events: Clear definitions of events triggering automatic or optional conversion
• Securities Compliance: SEC-mandated disclosures and investor protection provisions
• Default Provisions: Consequences and remedies under Philippine contract law
• Governing Law: Explicit reference to Philippine laws and jurisdiction
• Execution Block: Notarization requirements and authorized signatory details

A Convertible Agreement differs significantly from a Bond Purchase Agreement in several key ways, though both are investment instruments regulated by the Philippine SEC. While convertible agreements offer flexibility for startups, bond purchase agreements provide more structured, fixed-income investments.

• Investment Structure: Convertible agreements transform into equity at specific trigger events, while bond purchases remain debt instruments until maturity
• Risk Profile: Convertible agreements carry higher risk but offer potential equity upside; bonds provide fixed returns with lower risk
• Target Companies: Startups typically use convertible agreements, while established companies issue bonds
• Investor Rights: Bond holders receive guaranteed interest payments and principal return; convertible investors bet on future equity value
• Regulatory Requirements: Bonds face stricter SEC registration requirements and disclosure obligations than most convertible agreements