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I believe this article discussed only convertible debt, and only regarding seed-round funding. No matter what the situation, though, aren't the investors going

• owinebar 19y ago
  This is a good question. The other investors may already be in control of the company and just attempt replacing the founders with professional management. They may liquidate, since sunk costs are sunk. According to Paul's essays, the software of Viaweb was powerful because it was written in a high-level (but bottom-up) way. It seems like besides this being an edge over your competitors, it would also make your investors leery of getting rid of you. Who else would want to buy it if the Viaweb team wasn't there to walk them through it? And wouldn't that consideration also be true for lenders? I recall reading something about Trump's period of declining fortunes years ago - to whom, exactly, were the banks going to sell his gaudy yacht and other outrageously expensive and virtually unsellable properties? They were better off pretending he could still be successful for a while, and they got lucky.