Document background
The Convertible Equity Agreement is commonly used in the Swiss startup ecosystem as a flexible funding instrument for early-stage companies. It enables companies to raise capital without immediately setting a firm valuation, while providing investors with the potential upside of equity ownership. This document type is particularly relevant for startups seeking bridge financing or pre-Series A investment, where traditional equity rounds might be premature or impractical. The agreement must comply with Swiss corporate law requirements, particularly the Swiss Code of Obligations, and typically includes provisions for conversion triggers (such as qualified financing rounds or exit events), valuation caps, discount rates, and investor rights. It serves as a critical tool in the Swiss venture capital landscape, balancing the interests of both companies and investors while maintaining legal certainty and enforceability.
