Convertible Quote by Joe Lonsdale
“The convertible note is a useful and common financing structure in Silicon Valley. It's a form of debt that is really more a type of equity - one where the valuation hasn't been determined yet.”
About This Quote
A convertible note lets startups raise money now while postponing valuation, acting like debt that can become equity later.
In simple terms: It’s a financing tool that delays setting a company’s value.
Key Takeaway
Use convertible notes to secure early funding flexibly.
Themes
startup financing
valuation
equity conversion
Mood
pragmatic
cautious
Type
financial
strategic
When to use this quote
- seed funding
- early-stage fundraising
- negotiating terms
- company growth
Key Concepts
debt
equity hybrid
venture capital
Questions to Reflect On
- Is delaying valuation beneficial for your startup?
- What risks do convertible notes pose to founders?
A Different Perspective
It can create uncertainty for investors and may lead to complex future negotiations.
![“[The U.S. Treasury] can borrow basically unlimited amounts. They can stay there for years and years. These assets will be worth more money over time. So when Merrill Lynch sells a bunch of mortgage-related assets at 22 cents on the dollar like they did a month or so ago, the buyer goes - is going…” quote by Warren Buffett](https://sms4smile.com/quotes/img-quotes/a2a/warren-buffett-183_amount_the-u-s-treasury-can-borrow-basically-un_2051464.jpg)
