Document background
The Convertible Loan Note Agreement under Danish law is primarily used by growth companies and startups seeking flexible financing options. It enables companies to secure funding without immediately diluting existing shareholders while providing investors with downside protection through debt characteristics and potential equity upside through conversion rights. This document type is particularly relevant when companies need bridge financing before a larger funding round or when valuation negotiations are challenging. The agreement must comply with Danish corporate and securities laws, particularly regarding share capital requirements and conversion mechanisms. It typically includes detailed provisions on conversion triggers, price calculations, anti-dilution protections, and investor rights. The document's complexity requires careful consideration of both immediate financing needs and long-term implications for the company's capital structure.
