Power Struggles in Southeast Asia: VC Rights, Founder Conflicts and the Return of Convertible Debt - E599

"Convertible debt is coming back. Price equity rounds, I said, historically were used for almost all investments like 20 or 30 years ago. A SAFE note has only emerged over the past 15 years as a standard norm for early stage startups. But convertible debt is coming back as a norm for later stage startups. So a SAFE note is totally inappropriate for a middle or growth stage or late stage startup. Let's say the company has a $20 million valuation or $15 million valuation or $200 million valuation. They may say something like, I need some capital in the short term to make a decision, but it's hard for me to tell what the price for the next round is. So I want to use a convertible note structure to absorb some capital and then say, if you come in now and give me $10 million, for example, then you get a 20% discount on the next round in one year's time. So you get 20% bonus shares for coming in one year early." - Jeremy Au, Host of BRAVE Southeast Asia Tech Podcast

Jeremy Au breaks down the evolving power dynamics between VCs and founders in Southeast Asia, diving into board control, investor rights, and why most startups fail despite support. He shares practical lessons from both sides of the table, highlights the return of convertible debt, and explains how founders should think about conflict, dilution, and boardroom politics.