Document background
The Convertible Note Subscription Agreement is a critical document used in early-stage company financing under Australian law, particularly when companies seek bridge funding or want to defer equity valuation discussions. It enables companies to raise capital through debt that can convert to equity upon specified trigger events, such as qualified financing rounds, exits, or at maturity. This hybrid instrument offers investors the security of debt with the upside potential of equity, while providing companies with more flexible terms than traditional loans or immediate equity investment. The agreement must comply with Australian securities laws and regulations, particularly regarding financial product disclosure and corporate governance requirements. It's commonly used by startups and growth companies seeking to raise capital while maintaining flexibility in their corporate structure and avoiding immediate dilution.
