I’m not a fan of convertible notes…

I’ve been asked for opinions on convertible notes in seed rounds consistently for the past 10+ years.  I’m going to just say it again.  I am NOT a fan of convertible notes in seed rounds – I will always defer to founders wishes – but I strongly prefer to avoid convertible notes in seed rounds.  The reasons are many and varied – Fred Wilson articulates them very clearly in his post here.   I strongly agree with Fred and believe that it’s time for entrepreneurs to start with default of a priced round.

This entry was posted in Entrepreneurship, Financing, Founders, Uncategorized, Venture Funding and tagged , , . Bookmark the permalink.

1 Response to I’m not a fan of convertible notes…

  1. james.b.golden@us.pwc.com says:

    Great article, as well as Fred’s column. I recently had to work though this with one of my companies. I did not opt in or convert on the second note so I got paid out at 8% compounded so I didn’t lose, but I opted out of a company and founder I believed in. I won’t do any more convertible notes as an angel.

    James B. Golden, Ph.D. PwC | Managing Director, Healthcare IT Office: (860) 241-7351 | Mobile: (203) 317-0169 Email: james.b.golden@us.pwc.com PricewaterhouseCoopers LLP 185 Asylum Street ? Suite 2400 ? Hartford, CT 06103 http://www.pwc.com/us

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