Document background
The Unsecured Convertible Promissory Note is commonly used in the Netherlands as a bridge financing instrument, particularly for growing companies seeking interim funding before a larger equity round. This document type offers flexibility to both investors and companies by providing immediate debt financing with the potential for equity participation. The note's structure under Dutch law incorporates specific requirements from the Dutch Civil Code and Financial Supervision Act, particularly regarding interest calculations, conversion mechanisms, and corporate authority for share issuance. It serves as an efficient financing tool that delays equity valuation while providing investors with potential upside through conversion rights. The unsecured nature means no collateral is required, making it particularly suitable for early-stage companies with limited assets but strong growth potential.
