So to me the real advantages of convertible debt are:
1. They often don’t have control provisions. With equity often investors want “blocking rights on a sale or future finaning” that they often don’t get in a convertible debt deal. If this is the reason you’re doing it, then perhaps talk to investors about whether they’d be willing to give up that right in a Series Seed equity deal.
2. They often don’t have board seats attached to them. Again, this should be negotiable with a Series Seed.
--Summary of the argument.
The rest of the article is useful, too. It provides good background and context for his conclusions.
1. They often don’t have control provisions. With equity often investors want “blocking rights on a sale or future finaning” that they often don’t get in a convertible debt deal. If this is the reason you’re doing it, then perhaps talk to investors about whether they’d be willing to give up that right in a Series Seed equity deal.
2. They often don’t have board seats attached to them. Again, this should be negotiable with a Series Seed.
--Summary of the argument.
The rest of the article is useful, too. It provides good background and context for his conclusions.