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This isn't as epic as the "extended option exercise periods screw employees! Really!" post from Scott Kupor of a16z (http://a16z.com/2016/06/23/options-timing/

by rdl 10y ago

This isn't as epic as the "extended option exercise periods screw employees! Really!" post from Scott Kupor of a16z (http://a16z.com/2016/06/23/options-timing/ http://a16z.com/2016/06/23/options-timing/), but close. FFS. The "bad case" alternative to the second/third round of notes is often a down round or running out of money -- way worse. The "good case" alternative of a second higher cap note batch is fine. Founders and early investors can get screwed even if they raised as equity early on, too.

rdl 10y ago
(Er, sorry, didn't mean to be this mean; I'd been stuck in flight delays for hours.) I do think the analysis is both incorrect in conclusion (SAFE is the best choice in many/most cases for both sophisticated founders and new founders), and the case badly supported in the blog post. But it probably isn't someone doing the equivalent of pushing a self-serving agenda, which was my instinctive reaction and thus defensiveness.