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The Continuous Agreement for Future Equity (CAFE) has emerged as a popular investment instrument in Malaysia's growing startup ecosystem, offering a streamlined alternative to traditional convertible notes. This agreement type is particularly suitable for early-stage funding rounds where immediate equity pricing may be challenging or impractical. Under Malaysian law, specifically the Companies Act 2016 and relevant securities regulations, the CAFE provides a framework for investors to make immediate cash investments while deferring equity pricing and issuance until a future financing event. The document typically includes provisions for valuation caps, discount rates, conversion mechanisms, and investor rights, while ensuring compliance with Malaysian corporate law and securities regulations. It's especially valuable for startups seeking quick access to capital without the complexity and expense of establishing a current company valuation.
