As cperciva mentioned too, it's about the potential desire to cut losses and get out, and the damage that could do. I don't disagree that the Angels trying to c

As cperciva mentioned too, it's about the potential desire to cut losses and get out, and the damage that could do. I don't disagree that the Angels trying to cut their losses would get little back and there would be no value in rushing out. But in a panic logic is seldom the driver. In your experience, would most startups survive if their angel investors with convertible debt wanted out, even if the cash wasn't there to repay it anyway and there were no tangible assets to sell? Adeo's post reads to me as being a warning about the potential fallout in a context where people want out. I don't think there is much argument that the Angels wouldn't recoup much anyway. But neither is that the case when people sell public stocks that they've acquired at the top of the market when it hits the bottom. But even professional investors do that too with predictable regularity.