Thanks. It could also happen that the startup doesn't require more capital and is self sustaining. But doesn't get a buy out offer until after the convertible notes expire. In which case, the investor doesn't get to enjoy in the returns - he just gets his money back with some interest.

YC companies get a lot of publicity. And so their chances of raising another round of capital or getting bought out are very good. This is not the case with most startups. So a rolling close with convertible notes may not be the best option from investor point of view - no?

(With an equity deal, the startup can get an exit until it goes out of business. With a convertible notes deal, you have a fixed timeframe and you (as an early stage investor) lose out if the exit happens beyond that time period...

...So I thought one never did a convertible notes deal unless they knew there was a very very good chance of an exit within the specified time frame... am I missing something?

My point is - I don't see rolling closes with convertible notes getting too popular with most angels.)