Document background
The Convertible Debt Agreement is commonly used in the Danish market as a bridge financing tool, particularly suitable for growth companies and startups seeking to raise capital while deferring company valuation. This instrument offers flexibility by initially structuring the investment as debt, which can later convert to equity, typically during a qualified financing round or at maturity. The agreement must be carefully structured to comply with Danish law, particularly the Companies Act (Selskabsloven) and financial regulations. It typically includes provisions for interest payments, conversion mechanics, investor rights, and protection mechanisms. This type of agreement is particularly valuable when companies need immediate funding but prefer to postpone equity dilution or when there is uncertainty about current company valuation. The document includes comprehensive terms covering conversion triggers, price mechanisms, investor protections, and compliance with Danish corporate and securities laws.
