Templates
Legal
Convertible Note Agreement Template

Convertible Note Agreement Template

A Convertible Note Agreement is a legal document used when an investor provides funding to a company as a loan that may later convert into equity. It specifies key terms such as valuation cap, discount rate and maturity date, allowing investors to convert their investment into shares during a qualified financing or upon specific events. This document is often accompanied by a Subscription Agreement, which formalizes the investor’s purchase of the note and confirms eligibility and payment details.

Originally published by luminpdf.com

Used 114 times

Copy link
Report

Effortlessly edit PDFs anywhere

Save time and tackle any paperwork task with ease
Handle confidential information and signatures securely
Send work, negotiate terms and sign everything off with Lumin Sign

Convertible Note Agreement detailing loan conversion, maturity and financing terms

1/8

Convertible Note Agreement detailing loan conversion, maturity and financing terms page 0

Convertible Note Agreement detailing loan conversion, maturity and financing terms page 1

Convertible Note Agreement detailing loan conversion, maturity and financing terms page 2

Convertible Note Agreement detailing loan conversion, maturity and financing terms page 3

Convertible Note Agreement detailing loan conversion, maturity and financing terms page 4

Convertible Note Agreement detailing loan conversion, maturity and financing terms page 5

Convertible Note Agreement detailing loan conversion, maturity and financing terms page 6

Convertible Note Agreement detailing loan conversion, maturity and financing terms page 7

Used 114 times

Frequently asked questions

The Convertible Note Agreement details the terms in which an investor lends money to a company with the option to convert that debt into equity in the future. It defines the principal amount, interest rate, maturity date and conversion mechanics in the event of qualified financing, change of control or maturity. This agreement provides flexibility for startups and investors by combining features of debt and equity financing. It is used together with a Subscription Agreement, which formalizes the investor’s purchase of the note and outlines eligibility and procedural details of the investment.
The agreement is completed by both the company issuing the note and the investor. Each party enters details such as principal amount, interest rate and governing law to make the agreement enforceable.
Once signed, both parties retain a copy of the agreement for their records. It is not submitted to a regulator but should be stored with corporate financing and investment documents.

Discover Lumin’s products

Collaborate with existing colleagues and onboard new ones with Lumin and Lumin Sign. Our innovative solutions work great on their own, but they’re even better together.