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"Investors who put up the early “seed” capital for technology start-ups in the US have come up with a novel idea for how to value businesses that in most cases
by amirmc 16y ago
"Investors who put up the early “seed” capital for technology start-ups in the US have come up with a novel idea for how to value businesses that in most cases have not started trading: put the issue off until later"
I thought the move towards convertible notes was primarily being driven by the startups/founders rather than the investors.
- joshu 16y agoit really depends. in my experience, convertible notes are either for lamer startups (nobody wants to lead) or very hot ones (startup gets to demand terms) with equity in between. as an investor, i would MUCH prefer a capped note or equity to a merely discounted note (i want the earliest pricing.) as an entrepreneur, i would prefer the convertible, of course.
- jimboyoungblood 16y agoThe standard rationale for doing a note is that they're simpler and therefore cheaper to do, which in theory helps both founders and investors (unless anyone thinks its a good idea to blow startup capital on lawyers). This article was pretty much the most clueless thing I've ever seen written about convertible note financing. Better to just forget you ever saw it.