

False Dichotomies in Convertible Note vs Equity Seed Rounds - amirmc
http://www.gabrielweinberg.com/blog/2010/09/false-dichotomies-in-convertible-note-vs-priced-equity-seed-rounds.html

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dododo
am i correct in thinking that convertible notes can be thought of as a way of
changing the equilibrium of prisoner's dilemma? i.e., by introducing a
temporal element and rewarding early investors you avoid the equilibrium where
everyone is waiting for everyone else (akin to the Nash equilibrium of
prisoner's dilemma where both prisoners stay silent, instead you want both
prisoner's to confess).

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joshu
There's more to the game theory aspect, actually.

Since note holders get a better share with a lower valuation, it could cause
collusion with the VCs...

