funding, financingMuch has been written of convertible debt financing. Under what circumstances would using convertible equity funding be appropriate?
It depends on each startup, but I would use it to avoid setting a valuation on the company before I raise funding from a institutional investor. This is especially true if I am raising seed funding from friends and family.
Having said that, it isn’t preferred by savvy investors and is pretty expensive to draft such contracts due to overhead with the partial debt financing.
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