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In what instances would entrepreneurs prefer equity crowd funding vs product-based crowd funding? Please explain...

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Finance

In what instances would entrepreneurs prefer equity crowd funding vs product-based crowd funding? Please explain with examples.

Lets say you invested $250K in a convertible note during the seed round of a startup. The note had a $12M cap and a discount of 30%. At Series A, the startup raises money at a $15M valuation (To avoid confusion, consider this Pre-Money). Would the discount or the cap apply on your convertible note? Please include your formula below.

What is the expansion multiplier when discussing valuations and how does that impact a companys exit valuation?

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