Convertible promissory note (convertible equity) funding documents: Sample templates for Ontario startups

The convertible promissory note is becoming a more frequently-used investment vehicle for startups as funding documents grow more standardized and open-source. MaRS believes it is useful for startups to be able to access open-source convertible promissory note funding (debt) documents for use under Ontario law with accredited investors. To that end, MaRS offers these documents for educational purposes, and they are meant to be used together as a set. Together, the documents provide a starting point to save you time and money and to help in the negotiation of terms with investors. Remember to always seek good legal advice when arranging a financing.

  • Convertible Promissory Note Term Sheet (defines the overall terms of the deal)
  • Convertible Promissory Note Purchase Agreement (details the specific terms of the issuance of debt to the new investors and the representations that each party is making to the other)
  • Convertible Promissory Note (details the terms of the loan, including the provisions for the loan to be converted into equity)

Download the Convertible Promissory Note Term Sheet

Download the Convertible Promissory Note Purchase Agreement

Download the Convertible Promissory Note

What is the difference between a convertible promissory note and a convertible debenture?

  • A convertible promissory note is typically debt that is not secured by the assets of the business—it is usually used for smaller, short-term loans and is expected to convert to equity.
  • A convertible debenture is typically secured and is used as an alternative to an equity financing round—it may include the protective provisions and other terms for the benefit of investors typically found in a shareholders’ agreement.


This sample set of legal documents has been made available by MaRS Discovery District for informational purposes only and does not constitute advertising, a solicitation, or legal advice. Neither the transmission of these sample legal documents nor the transmission of any information contained in this website is intended to create, and receipt hereof or thereof does not constitute formation of, a lawyer-client relationship. Internet subscribers and online readers should not rely upon these sample legal documents or the information contained in this website for any purpose without seeking legal advice from a qualified lawyer practicing in the reader’s province.

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