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The Convertible Notes Agreement is commonly used by companies seeking to raise capital while deferring equity valuation. This document, governed by English and Welsh law, provides a structured framework for issuing debt that can later convert into equity shares. It is particularly popular among startups and growth companies as it offers flexibility in terms of investment timing and valuation. The agreement typically includes detailed provisions on conversion mechanics, interest rates, maturity dates, investor protections, and compliance with UK financial regulations. It serves as a bridge between debt and equity financing, allowing companies to secure immediate funding while providing investors with the potential upside of equity ownership.
