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No matter how many times you say that this situation is "literally the definition of debt" you're still not going to the legal definition of debt so that it app

No matter how many times you say that this situation is "literally the definition of debt" you're still not going to the legal definition of debt so that it applies here. Equity is not debt, they do both until eventually owing another entity money. But in a legal sense that is not literally the definition of debt, because it is also part of equity which again isn't debt. From a practical perspective the difference is that with equity you accept a lower floor (you might get nothing) in exchange for a higher ceiling (your invest might 100x if the company goes public). That's the deal these investors signed up for and unfortunately for them they got option number 1. They're not owed anything because that's the deal they agreed to.

Benjamin_Dobell 10y ago
I have zero idea what the legal definition of debt is in the country/jurisdiction you live in. I also didn't specify what country I live in. Additionally, my first point was one of metaphorical (social) debt. Given the context and the fact I'm typing in English it ought to have been clear I was referring to the definition of debt in English. If that wasn't clear, I apologise for the confusion.
- praneshp 10y ago
  > I have zero idea what the legal definition of debt is in the country/jurisdiction you live in. I also didn't specify what country I live in. Only definition that matters is the one in the jurisdiction this startup was in.
  - Benjamin_Dobell 10y ago
    Last I checked this was a tech website not a legal one...
    - praneshp 10y ago
      So?