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The Convertible Loan Agreement Startup is a specialized financing instrument used in the Dutch startup ecosystem when companies seek bridge financing or early-stage investment. This document is typically employed when a startup needs immediate funding but determining a concrete valuation is challenging or premature. The agreement, governed by Dutch law, provides investors with the security of debt while offering the potential upside of equity investment through conversion rights. It includes essential provisions regarding loan terms, interest rates, conversion triggers (such as qualified financing rounds or exits), valuation caps, and discount rates. The document ensures compliance with Dutch corporate law requirements, particularly regarding share issuance and corporate governance, while protecting both investor and company interests through carefully structured conversion mechanics and information rights.
