Document background
The Convertible Note Subscription Agreement is a crucial financing instrument commonly used in the Philippine startup and growth company ecosystem. This document is typically employed when companies seek bridge financing or early-stage investment while deferring company valuation to a future date. It enables companies to receive immediate funding in the form of debt that can later convert to equity, usually at a discount to the next financing round. The agreement must comply with Philippine securities laws, particularly the Securities Regulation Code and relevant SEC regulations, and needs to address specific local requirements for debt instruments and their conversion into equity. It's especially relevant for companies looking to raise capital without immediately diluting equity, while giving investors the potential upside of equity participation through future conversion rights.
