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A Convertible Agreement lets early-stage investors provide funding to Belgian startups in exchange for the right to convert their investment into equity shares later. It works like a loan that can transform into company ownership, typically when specific events happen - like a major funding round or company sale.

Under Belgian corporate law, these agreements offer flexibility by delaying complex share valuations until the company is more mature. They help startups get quick access to capital while giving investors potential upside through future equity conversion, usually at a discount from the next round's share price. Both parties benefit from simpler paperwork and lower legal costs compared to immediate equity investments.

Consider using a Convertible Agreement when your Belgian startup needs quick funding but you're not ready to set a firm company valuation. This tool works especially well during pre-seed and seed rounds, when determining exact share prices might be premature or could slow down vital capital raising.

The agreement makes perfect sense if you expect a larger funding round within 12-18 months. It lets you access capital immediately while postponing complex valuation discussions. Belgian entrepreneurs often choose this route when dealing with angel investors or early-stage venture funds who understand the local startup ecosystem and accept the flexibility of future equity conversion.

• Equity-based conversions: Common in Belgian tech startups, these agreements convert to shares at a predetermined valuation cap during the next funding round
• Discount-based conversions: Offers investors a set percentage discount on future share prices, typically 15-25% below the next round's valuation
• Hybrid structures: Combines both valuation caps and discounts, giving investors the more favorable term when converting
• Time-based conversions: Automatically triggers conversion after a specific period, usually 18-24 months, protecting investor interests
• Revenue-linked conversions: Popular among Belgian scale-ups, these convert based on reaching specific revenue milestones

• Startup Founders: Sign Convertible Agreements to secure quick funding while maintaining control and postponing complex valuation discussions
• Angel Investors: Provide early-stage capital through these agreements, gaining potential equity rights at favorable future terms
• Corporate Lawyers: Draft and review agreements to ensure compliance with Belgian corporate law and protect client interests
• Business Accelerators: Often facilitate these agreements between startups and their network of investors
• Financial Advisors: Help structure conversion terms and advise on financial implications for both parties
• Notaries: Authenticate agreements and ensure proper registration under Belgian legal requirements

• Company Details: Gather current capitalization table, financial statements, and corporate registration documents
• Investment Terms: Define investment amount, conversion triggers, valuation cap, and any discount rates
• Timeline Parameters: Set clear maturity dates and specify qualifying funding round thresholds
• Investor Information: Collect full legal details of all participating investors and their investment vehicles
• Security Measures: Prepare anti-dilution provisions and voting rights specifications
• Documentation Review: Use our platform to generate a legally compliant agreement that includes all mandatory Belgian corporate law elements
• Signature Requirements: Confirm proper authorization levels for all signing parties

• Parties Section: Full legal names, addresses, and registration details of company and investors
• Investment Terms: Principal amount, interest rate (if any), and payment conditions
• Conversion Mechanisms: Detailed triggers, valuation caps, discount rates, and conversion price calculations
• Maturity Date: Clear specification of agreement duration and automatic conversion terms
• Information Rights: Investor access to financial statements and material business changes
• Anti-dilution: Protection mechanisms for future funding rounds
• Governing Law: Explicit reference to Belgian corporate law and jurisdiction
• Signature Block: Authorized signatories' details and execution requirements

A Convertible Agreement differs significantly from a Bond Issuance Agreement in several key aspects, though both are instruments for raising capital under Belgian law. While convertible agreements offer flexibility for startups seeking early-stage funding, bond issuance agreements typically serve more established companies seeking structured debt financing.

• Investment Structure: Convertible agreements transform into equity based on future events, while bonds remain debt instruments with fixed repayment terms
• Regulatory Requirements: Bond issuances face stricter Belgian FSMA oversight and disclosure requirements than convertible agreements
• Target Investors: Convertible agreements attract venture capital and angel investors, while bonds appeal to institutional investors seeking fixed returns
• Documentation Complexity: Bond issuances require more extensive documentation and regulatory filings compared to relatively straightforward convertible agreements
• Risk Profile: Convertible agreements carry higher risk but offer greater potential returns through equity conversion rights