[jasonkwon]

Everything you say is fair. On the point about "at least 5%," this is addressed in footnote #3 to the blog post. It's true that it's a simplification, but that's partly what makes the construct easier to work with.

I think the other thing to take into account is that if you're doing a comparison of safes, notes and priced rounds, it's not just a matter of seeing if speed and cost are equal, but what else you might have to give up in terms of rights. Priced rounds can come with downround protection too (often do), as well as board seats and investor vetoes on financings, sales of the company, etc. Convertible notes are debt so the investors will have a technical right to demand their money back after a set time (maturity).

[adw]

Yep. I'm essentially arguing that simplifying here is dangerous, no construct is easy to deal with, and I'd rather more care were taken (broadly across the entire industry, not singling out YC here) in representing that.

Also: these terms are completely reasonable and under normal circumstances if I were doing a startup – and this valuation made sense – they'd be terms I'd be happy to take. For the avoidance of doubt, all of this is about the marketing, not the substance; the substance is above reproach.

As you say, speed, costs, rights (board seats, information, pro-rata, drag-along/tag-along, you name it), pref structure, etc are all real things. I just prefer addressing those all up front.

[jasonkwon]

Cool. Appreciate the thoughtful feedback.