When to use this template
Use it when an investor lends money to your Swiss company limited by shares now and both sides intend the debt to convert into shares later, typically in the next financing round. That is the standard shape of early-stage bridge financing in Switzerland: an existing shareholder, a business angel or a friendly fund finances the next stretch without anyone having to defend a valuation today.
It is not a SAFE. Copying a US form onto a Swiss cap table skips the part that matters here: shares in an AG come into existence only through a formal capital increase resolved by the shareholders, so a document that ignores that machinery promises something the company alone cannot deliver. If you are still weighing a convertible against a priced round, we compare the two in convertible loans vs. priced rounds.
Deferred fights resurface at conversion
The convertible's appeal is that nobody argues about valuation now. But the argument is deferred, not settled: it returns at conversion in the form of a discount, a cap and a definition of the qualified round. Those mechanics decide how much of the company the lender eventually holds, and they are agreed at the moment when everyone is friendly and nobody is running numbers. Spend the attention you saved on valuation there, and model the conversion against your cap table before signing.
The clauses, one by one
Loan, interest and maturity
At its base the document is an ordinary loan in the sense of Art. 312 CO: the lender pays, the company owes repayment until conversion extinguishes the claim. Interest accrues rather than being paid out, and the template states the choice plainly: accrued interest either converts with the principal or is paid in cash at the end. Pick one; a silent document leaves the number of conversion shares open.
Subordination
The optional subordination has the lender rank behind all other creditors if the company becomes overindebted in the sense of Art. 725b CO. The company will ask for it when its equity is thin, because a properly subordinated loan can spare the board the notification to the court. Understand what the lender gives up: in the worst case, last place in the queue. Grant it deliberately or strike the clause.
Conversion in a qualified financing round
The core of the document. A qualified financing is defined by a minimum round size you set, so a token top-up cannot trigger conversion. On completion, the loan converts into the shares issued in that round, at the round price minus an agreed discount, but never above the price implied by the valuation cap. Whichever of the two yields more shares applies: the discount rewards early risk, the cap fixes the highest valuation at which the money converts.
Conversion or repayment at maturity
If no round arrives by the maturity date, the template forces a decision: conversion into shares at a fallback valuation, or repayment. Choose now, while choosing is cheap. Documents that stay silent here produce zombie loans, due, unpaid and unconverted, which resurface in the due diligence of the very round everyone was waiting for.
Change of control
If the company is sold before conversion, the lender elects between immediate repayment and conversion just before closing. Without this clause, an exit would leave the lender with repayment at par while the shareholders collect the upside the loan financed.
Mechanics of conversion and shareholder support
This is where do-it-yourself convertibles fail. Conversion runs through the corporate machinery of Art. 652 ff. CO: a capital increase resolved by the general meeting, or shares issued from conditional capital under Art. 653 CO, which must already sit in the articles of association (Art. 653b CO). The lender subscribes the new shares and pays by setting off the loan. Because the company cannot vote its own capital increase, the template has the principal shareholders co-sign an undertaking to vote for it and waive their subscription rights. That co-signature, or existing conditional capital covering the loan, is what turns the conversion promise into something enforceable.
Lender status, information and the rest
Until conversion the lender is a creditor with no shareholder rights; the template grants annual accounts as a window into the company. After conversion, the lender owes nothing beyond the issue price, the principle of Art. 680 CO; any shareholders' agreement is a separate accession. The company represents that the cap table annexed is complete, and the loan cannot be assigned to a stranger without consent.