Notation Agreement
Content
Definition
A Notation Agreement is an agreement detailing the terms of a convertible note, including interest rate, maturity date, and conversion mechanics.
Usage and Context
Frequently asked questions
- What is a convertible note agreement? A convertible note agreement is a type of loan that converts into equity, typically in a future financing round.
- What is the convertible note conversion model? The convertible note conversion model outlines how and when a convertible note converts into equity, usually based on a set formula or terms.
- What happens at the maturity of a convertible note? At maturity, a convertible note either converts into equity at a predetermined rate or the borrower repays the principal with interest.
Benefits
Notation agreements provide clear terms for investors and companies, ensuring transparency and understanding in convertible note transactions.
Conclusion
Notation agreements detail the terms of convertible notes, providing clarity and structure for both investors and companies in financing deals.
