Document background
The Unsecured Convertible Promissory Note is a strategic financing instrument commonly used in early-stage company funding, particularly in the Austrian market where traditional debt financing might be less accessible for growth companies. This document type bridges the gap between straight debt and equity financing, offering investors the security of debt with the upside potential of equity participation. It is particularly useful in situations where company valuation might be premature or uncertain, allowing parties to defer valuation discussions while providing immediate funding. The document incorporates all necessary provisions required under Austrian law, including compliance with the Austrian Civil Code (ABGB) and Commercial Code (UGB), while maintaining flexibility for commercial terms such as conversion triggers, interest rates, and maturity dates. The unsecured nature of the note reflects the typical risk profile of early-stage investments while potentially offering faster execution compared to secured instruments.
