[pospischil]

Seems to introduce some signaling issues...

The stronger the company, the less likely they are to accept the note at a 3mm cap.

[devongall]

Agreed - seems like the terms could potentially defer the top-quality companies (although most would be happy to have the $ in their pockets), while the start-fund structure makes it attractive to any stage.

I'd hope the money is elective though, as that would certainly solve the problem.