4 ms·
I’m speaking specifically of early investment in debt, which does not have the impacts you describe and is typically intended to convert to equity. In my experi
by svnt 3y ago
I’m speaking specifically of early investment in debt, which does not have the impacts you describe and is typically intended to convert to equity. In my experience it is better for the founder than a priced round in basically every sense.
However it is easier to wash out and leaves no cap table trace, which is why some investors do not do it very much anymore.
- nylonstrung 3y agoThis type of convertible note you're describing is almost never used these days. As I VC I talked 1000s of companies fundraising and it was not something founders ever sought out SAFEs are almost always the alternative to priced rounds
- svnt 3y agoAs a VC you would be talking to people seeking priced rounds, not convertible debt. Angels started using SAFEs because YC started pushing them. It doesn’t mean that convertible notes aren’t better for founders. Founders will conform to the market.