Document background
The Safe Agreement Venture Capital document is designed for early-stage companies in Hong Kong seeking to raise capital through a simplified investment mechanism. This agreement type has gained popularity as an alternative to convertible notes, particularly in the Hong Kong startup ecosystem where traditional equity rounds may be premature or impractical. The document establishes the terms under which an investment will convert to equity in future financing rounds, typically including provisions for valuation caps, discount rates, and specific conversion triggers. Operating under Hong Kong law, it must comply with local securities regulations and the Companies Ordinance, while providing flexibility for both domestic and international investors. The agreement is particularly suitable for pre-valuation funding rounds where determining a precise company valuation may be challenging or counterproductive.
