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A convertible note is like a loan, but instead of using an asset like a house for collateral, the company stock is the collateral at a valuation for the company that would be decided in the future. Di Bacco Doug Sharp FORM SUMMARY This form is a convertible note to be used in connection with the seed-stage financing of a startup company. The definitive documentation [will combine the loan agreement terms, the convertible note [, and the security agreement] in a single document] [will consist of a note purchase agreement with attached forms of the note[s] and security agreement to be executed on closing].
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A convertible note is a type of seed financing.
Also note that the documents were designed for companies incorporated in Delaware.
These documents are intended only for US companies. TL;DR: We've created a publicly downloadable template for a seed convertible note (with useful footnotes), based on the template we've used hundreds of times in seed convertible note deals across the U. This means, obviously, that the investor also needs to believe in the business to invest, because it is the intention of the investor to convert its.
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