Not exact matches
Convertible debt with no
cap is stupid for investors.
Convertible debt WITH a
cap is stupid for founders.
Another mechanism is «
convertible debt with a
cap» (max price).
If I'm investing in
convertible debt I'm fine as long as there's a
cap.
In summary — I don't believe the «
convertible debt» has «won» in the market — especially not «
convertible debt with no
cap.»
I'm OK to fund companies with a
convertible debt with
cap model for small investments — no problem.
Convertible debt is an investment that «converts» into equity in the future usually at a discount to your next funding round price and sometimes has a «
cap» (maximum price).
As I've cited the problem I see for investors is the risk of not pricing and for entrepreneurs «
convertible debt with a
cap» gives them a maximum price but not a minimum.