Just wanted to thank you for doing a deep dive into this with all your comments. This certainly changes equation and potential payout of their perhaps oversimplified messaging of simply getting 3-5x returns, but not knowing that the founder is in a gridlock situation if it makes sense for them to raise more money. I can understand how if a business required more money just to sustain business and keep it alive, then converting to equity makes more sense for additional perceived risk that more money was required to sustain, however it's odd that that mechanism would also then more act as a penalty for the more successful businesses - and definitely is turn off.
3-5x return cap sounded super refreshing - and almost like a dream come true, however assuming they're good judge of characters and select well, then I could see them pulling off a very successful investment protocol. I may still contact them to see what their intentions are and what expectations/agreement may be possible.
3-5x return cap sounded super refreshing - and almost like a dream come true, however assuming they're good judge of characters and select well, then I could see them pulling off a very successful investment protocol. I may still contact them to see what their intentions are and what expectations/agreement may be possible.