

When In Doubt on Pre-Money Valuation, Smart Guys Procrastinate - vcexperts
http://vcexperts.com/vce/library/encyclopedia/documents_view.asp?document_id=1360

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jhancock
I've seen this technique applied recently. The founders had plenty of people
interested in the angel round. Yet, they refused to put a price on the
investment, deferring it to a future funding event. Even many savvy investors
that understood why they were doing this and found the contracts to be clean,
decided not to invest as the founders were saying "I need $x hard cash from
you now and some time in the future you will know what percent of the company
that translates to." It may be a good way to go, but its a hard way. Its much
easier to be prepared to name your price, raise only what you need and live
with it.

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holaamigos
Convertible debt sucks for angel investors, they are taking far more risk than
the VCs but are only getting a 20 to 30 percent discount.

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ALee
Nowadays though, convertible debt actually has a pre-money valuation tied to
it and is just a faster financing mechanism.

