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But thinking about it, the US economy is based on credit and VC is another form of credit, right?
by yuhong 9y ago
But thinking about it, the US economy is based on credit and VC is another form of credit, right?
- JumpCrisscross 9y agoNo, VC is equity. It may be structured as a note for tax reasons, but the conversion potential dominates the rate or credit terms. Credit is the other side of debt, which is separate from equity. (Bonus round: when the U.S. Treasury coins money, it records a claim against the Treasury's equity [1]. This is separate from the Federal Reserve's banknotes, which are a debt-like claim on the Fed. In practice, the Fed buys equity in the Treasury and then issues banknotes.) [1] https://books.google.com/books?id=HIuxDQAAQBAJ&pg=PA169&lpg=PA169&dq=treasury+coin+equity+accounting&source=bl&ots=GwD0eQtsrI&sig=Ld6-FmhVxxNiycjiYRwD-p_AM6w&hl=en&sa=X&ved=0ahUKEwiq5ITJxY7VAhWLOj4KHXUcBo4Q6AEIUDAI https://books.google.com/books?id=HIuxDQAAQBAJ&pg=PA169&lpg=...