Document background
The Convertible Debt Agreement is a sophisticated financing instrument commonly used in Nigeria's growing business ecosystem, particularly for startups and scaling companies seeking flexible funding options. This document bridges the gap between traditional debt and equity financing, offering companies a way to raise capital without immediately determining a valuation while providing investors with potential equity upside. The agreement must comply with Nigerian legal requirements, including CAMA 2020 and SEC regulations, making it suitable for both domestic and international investment scenarios. It typically includes detailed provisions on conversion triggers, price mechanisms, investor protections, and regulatory compliance requirements specific to the Nigerian jurisdiction. The document is particularly valuable for companies in their early to growth stages who need capital but want to defer valuation discussions or who are planning for a larger equity round in the future.
