PT - JOURNAL ARTICLE AU - Adrian Horotan TI - Convertible Debt with Discount Sacrifices the Upside<br/>for Early-Stage Investors AID - 10.3905/jpe.2012.15.2.025 DP - 2012 Feb 29 TA - The Journal of Private Equity PG - 25--27 VI - 15 IP - 2 4099 - https://pm-research.com/content/15/2/25.short 4100 - https://pm-research.com/content/15/2/25.full AB - Unless the discount rate is much higher than what is considered fair, investing in convertible debt with a discount to the next financing round—without warrants, founders stock, or a conversion price cap—is equivalent to sacrificing most of the upside potential for early stage investors.TOPICS: Private equity, portfolio construction, fixed income and structured finance, portfolio theory