Document background
The Convertible Agreement Regarding Equity (CARE) is designed for early-stage funding scenarios in India where traditional equity valuation may be premature or challenging. This document is typically used when companies seek bridge financing or initial investment rounds, allowing them to defer complex valuation discussions while providing investors with the security of future equity conversion. The agreement incorporates essential elements required under Indian corporate law and securities regulations, including specific provisions for foreign investment if applicable. It outlines key terms such as investment amount, conversion mechanisms, valuation caps, and discount rates, while ensuring compliance with Indian regulatory requirements. This instrument is particularly valuable for startups and growing companies that need immediate capital injection while maintaining flexibility in their capitalization structure.
