Re:Ask: Should a startup take $50k worth of uncapped convert...
by johnrgrace on Sunday September 30, 2012 @09:16PM
(#4594871)
If you need the money yes, unless the note has some crazy terms.
On the pro side, you've got dry powder and runway from the $50k to keep doing what you're doing. Also you've gotten a vote from at least one investor with real money that you're doing something useful. An uncapped convertable note keeps you out of a lot of messy things like valuation etc.
On the con side, you now have an investor and you're going to need to talk with them and listen when they say things. You run the risk of having a crazy idiot to deal with.
On the pro side, you've got dry powder and runway from the $50k to keep doing what you're doing. Also you've gotten a vote from at least one investor with real money that you're doing something useful. An uncapped convertable note keeps you out of a lot of messy things like valuation etc.
On the con side, you now have an investor and you're going to need to talk with them and listen when they say things. You run the risk of having a crazy idiot to deal with.