At this point Time Hayden had done as much as he could with his personal credit cards and using his own cash. Now he needs $1 million to go to the next phase. He was able to get half of that through four corporations if he could raise the other half himself. He presented to a number of venture capitalist, however, it was his parents, friends and other who knew of him or one of the other investors.
- Why might investors want a convertible note instead of getting stock in a start-up?
- From the standpoint of the smaller investors, what are the advantages or disadvantages of having a single large investor (like one of the entertainment companies) along with the smaller ones?
- If the large firms decide not to invest, what are the options available to Tim and how likely will he be to raise the capital needed?
- Finally, what do you think is the answer to Tim’s question – what could go wrong now?
