
Ask the Wizard: Convertible Debt Jeopardy - brett
http://www.burningdoor.com/askthewizard/2007/04/convertible_debt_jeapordy.html
======
joshwa
This is what CRV does, right?

<http://www.crv.com/AboutCRV/QuickStart.html>

~~~
jey
Note #1 of "Why to Not Not Start a Startup" implies that YC also does
convertible debt. <http://paulgraham.com/notnot.html#f1n>

~~~
joshwa
No, that note seems to imply that there were other angels (not YC) who had
convertible debt.

~~~
brett
Yeah. And if yc got 38 % on the dollar they had to have been holding common
stock (or something like it I am unaware of) or they would have at least got
their money back.

Preferred shares don't really make sense for YC given the amount they are
investing and the valuation at which they are doing it. It would be like
hedging against exits below 100k, at which point, why would they even care.

I'm guessing convertible debt would be odd for them as well for one of the
reasons given by Costolo and others: as soon as YC invests they are
concentrated on raising the valuation of the company as high as possible,
convertible debt would put them slightly at odds with this.

