I once read a story about a company that used convertible notes to raise pre-seed, then literally never raised again so the VCs never got equity. The founder even screwed over employees on options with this.
Does anybody know the company I'm talking about? Can't find it.
Conversation
This Tweet is from a suspended account. Learn more
Replying to
Convertible notes convert into equity when a company first raises money in a priced round. It's an easy way to sell equity in a startup without having to deal with valuations.
But if you never have that priced round then the investor never gets their equity