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Just raised a seed on convertible notes, was never asked for any kind of preference
by woah 8y ago
Just raised a seed on convertible notes, was never asked for any kind of preference
- JumpCrisscross 8y ago> Just raised a seed on convertible notes, was never asked for any kind of preference Notes are debt. They're inherently higher than stock on the capital structure. They may convert into shares with no preference. But as long as they're notes, they're higher than even preferences shares.
- Dwolb 8y agoSure but those preferences only really affect equity payouts when the company’s in distress. When selling the a non-distressed company, equity will receive cash.
- JumpCrisscross 8y ago> those preferences only really affect equity payouts when the company’s in distress Liquidation preferences and bankruptcy priority only matter when a company is distressed.
- Dwolb 8y agoIs it not possible to sell a company that is currently profitable, cash flow positive, and is worth less than what investors had put in?
- sytse 8y agoThat ask will happen on conversion by the A round investor.