Vircon Legal advised PulpoAR on its convertible note financing round. The transaction closed on 29 September 2020 with participation from Idacapital, Etkiyap and AKİŞ GYO. The financial terms of the round were not disclosed at the request of the parties.
Convertible note structures sit in a structurally distinct category from priced equity rounds. The instrument delivers near-term capital to the company without requiring the parties to agree on a contemporaneous valuation, and converts into equity at a future priced round — typically with a valuation cap and discount that compensate the convertible note holders for their earlier-stage risk. Getting the conversion mechanics, the cap and discount calibration, and the maturity and interest provisions correctly aligned at signing is what allows the instrument to perform as designed when the next priced round triggers conversion. The cleanest convertible note closings are the ones where the parties have a shared, documented understanding of how conversion will work across multiple possible future scenarios.
Vircon Legal advised on transaction structuring, convertible note documentation with valuation cap and discount mechanics calibrated to the company’s expected trajectory, maturity and interest provisions, governance design for the convertible holder cohort, founder commitments, and the corporate housekeeping required to support the eventual conversion event. Multi-investor convertible note rounds particularly benefit from clean documentation — the instrument has to function consistently across multiple holders with potentially different conversion expectations.
PulpoAR raised additional convertible note capital in May 2021 — see our note on that round — and a further convertible note round in October 2021 with Alim Küçükpehlivan. The company subsequently completed a priced seed round backed by Akkök Group and angels — see our note on the priced seed round. PulpoAR was eventually acquired by The Glimpse Group in December 2022 — see our note on the acquisition for the full trajectory.
For more on our early-stage and convertible-note practice, see our Startup Law and Sell-Side Representation pages.
