There’s been some very good content recently generated on the pros and cons of convertible debt financing for early stage rounds.  As it seems with most discussions on startups these days, the debate taken place within the web-startup community.  I thought it would be a good idea to pass these conversations along to the biotech and nanotech folks as they are very relevant in these fields as well.  Collectively the articles touch on the implications of convertible debt financing from the perspective of both the entrepreneur and investor.

Using convertible debt financing for early stage web-startups has obviously become very popular.  Some of the reasons outlined in the below articles emphasize some of the uniqueness of these companies: distribution is near free, technology costs are near free, etc.  It would be really interesting to understand if this is also a trend in Angel investing in biotech or other more capital intensive industries.  If anyone has any insight please share.

Paul Graham: High Resolution Fundraising

Seth Levine: Has convertible debt won? And if it has, is that a good thing?

Mark Suster: Is Convertible Debt Preferable to Equity?

Fred Wilson: Some Thoughts on Convertible Debt

Chris Dixon: Converts versus equity deals and Why seed investors don’t like convertible notes

Ben Yoskovitz: Raising Financing: Convertible Debt vs. Equity