Document background
The Convertible Note Purchase Agreement is a crucial financing instrument used primarily by startups and growth companies in Denmark seeking to raise capital while deferring company valuation. This document is typically employed when companies need interim financing before a larger equity round or when parties want to provide flexibility in terms of future equity conversion. It must comply with Danish corporate law, particularly the Danish Companies Act (Selskabsloven) and relevant securities regulations. The agreement comprehensively covers the terms of the investment, including principal amount, interest rate, maturity date, conversion mechanisms, and investor rights. It's particularly useful in scenarios where immediate equity valuation is challenging or when companies want to incentivize early investors with potential equity upside while initially structuring the investment as debt.
