Convertible Note Deed (Pre-Money)
A Convertible Note Deed is an agreement whereby an investor provides funding to a new company in return for future equity. The conversion price of the notes is based on a "pre-money" valuation of the company.
4.6 (8 reviews)
Last updated November 12, 2024
Under 10 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
A Convertible Note is an agreement whereby an investor (Noteholder) provides funding to a new company in return for future equity. This Convertible Note Deed sets out the terms agreed upon between the company and Noteholder. This Deed provides details of the conversion price, events of default and voluntary conversion.
Use this Convertible Note Deed if:
You are an early-stage business hoping to raise finance; or
You are a seed investor seeking to claim future equity of a new business.
What does the Convertible Note Deed cover?
Creation, issue and subscription of Notes;
Register of Notes;
Payment of subscription amount by Noteholders;
Purpose of Notes issued;
Company representations and warranties;
Noteholder representations and warranties;
Conversion and redemption procedures; and
Transfer of Notes.
Further information:
The Legal Risk Score of a Convertible Note Deed (Pre-Money) Template
Our legal team have marked this document as medium risk considering:
- It is part of a complex transaction.
- The deed contains terms such as MFN that are favourable to the investor and should be reviewed carefully.
Convertible Note Deed (Pre-Money) Checklist
Complete your free Convertible Note Deed (Pre-Money) with our checklist
Get the right individuals to sign the document
Where the parties are companies, their authorised representatives should sign this document.
Keep the document readily available
Both parties should have the document handy as an easy reference for their obligations.
Follow the conversion schedule
The notes must convert on or before the conversion date.
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