The reason convertible notes allow more flexibility in price is
that valuation caps aren't actual valuations, and notes are cheap
and easy to do. So you can do high-resolution fundraising: if you
wanted you could have a separate note with a different cap for each
investor.
That cap need not simply rise monotonically. A startup could also give better deals to investors they expected to help
them most. The point is simply that different investors, whether because of the help they offer or their willingness to
commit, have different values for
startups, and their terms should reflect that.
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High Resolution Fundraising aluations. Which they deserve because they're taking more risk. It's much safer to invest in a startup Ron Conway has already invested in; someone who comes after him should pay a higher price. <span>The reason convertible notes allow more flexibility in price is that valuation caps aren't actual valuations, and notes are cheap and easy to do. So you can do high-resolution fundraising: if you wanted you could have a separate note with a different cap for each investor. That cap need not simply rise monotonically. A startup could also give better deals to investors they expected to help them most. The point is simply that different investors, whether because of the help they offer or their willingness to commit, have different values for startups, and their terms should reflect that. Different terms for different investors is clearly the way of the future. Markets always evolve toward higher resolution. You may not need to use convertible notes to do it. With suffic Summary
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