Many investors suggest structuring a(n) _____ deal for friends and family because this tactic avoids having to place a valuation on the company that is likely to be wrong.

Question

Quizplus · Accepted Answer

Convertible debt is often used in early-stage investments to avoid placing a potentially inaccurate valuation on a company, as it allows the investment to convert into equity at a later date when the company is more mature and a valuation can be more accurately determined.

Many Investors Suggest Structuring A(n) _____ Deal for Friends and Family