Document background
The Convertible Note Purchase Agreement is commonly used in the German startup and growth company ecosystem as a flexible financing instrument. It allows companies to raise capital without immediately setting a firm valuation, while providing investors with the security of debt and the upside potential of equity. This document type must comply with German legal requirements, including provisions of the German Civil Code (BGB), Commercial Code (HGB), and relevant corporate laws. It is particularly useful in bridge financing rounds, seed investments, or when companies need quick access to capital before a priced equity round. The agreement typically includes detailed provisions on conversion mechanics, interest calculations, maturity dates, and investor protections, all structured within the framework of German law.
