What's better for angels, equity or convertible debt?
| December 13, 2007 |  View for printing |
This may not be a new debate, but it's one worth revisiting as the competition for stakes in capital-efficient early-stage startups pits angel investors against venture capital firms. Knox Massey, head of the Atlanta Technology Angels, writes on his blog that he's seeing more entrepreneurs ask for convertible debt rather than an equity investment.
Convertible debt of course converts to equity if or when a venture capitalist invests in a company. In some cases it can be repaid with interest if a startup has the means. VCs often favor convertible debt because it allows them to value a startup at a later date without having to worry about angels valuing a company too high or too low.
Full Story: http://www.techconfidential.com/the- ... ebt-deb.php
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