# Convertible Note Template – New Zealand
A Convertible Note is a flexible debt instrument used by startups and investors in New Zealand to secure funding while deferring valuation until a future equity round. This document is essential for simplifying early-stage investments under New Zealand law, providing clear terms for conversion into shares.
Why Use Signova AI?
- Speed: Generate a fully customised Convertible Note in minutes, not days.
- Compliance: Designed to meet New Zealand legal standards and regulatory requirements.
- No Lawyer Needed: User-friendly AI guidance eliminates the need for costly legal consultations.
- E-Signature Included: Sign and execute your document digitally for immediate validity and convenience.
- Principal Amount & Interest Rate: Specifies the loan amount and applicable interest under New Zealand lending laws.
- Conversion Terms: Defines when and how the note converts into equity, including trigger events like qualified financing rounds.
- Valuation Cap & Discount Rate: Protects investors by setting maximum conversion price limits and discounts on share price.
- Maturity Date: Establishes the date when the note must convert or be repaid.
- Repayment Terms: Outlines conditions for repayment if conversion does not occur.
- Governing Law: Confirms New Zealand jurisdiction and dispute resolution procedures.
- Answer Questions
Key Clauses Included
How It Works
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Frequently Asked Questions
Q: Is a Convertible Note legally binding in New Zealand?
A: Yes, when properly executed, Convertible Notes are enforceable contracts governed by New Zealand law.
Q: Can I convert the note into any class of shares?
A: Typically, conversion is into the next round’s preferred shares, but terms can be customised to suit your agreement.
Q: What happens if the note reaches maturity without conversion?
A: The note may either be repaid with interest or converted into equity at a pre-agreed valuation, depending on the terms set.
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