In a founder-funded company, how should the founders treat the cash that they contribute to the company? Should it be convertible debt? Equity (but the founders already have all the equity initially)?
If it makes a difference, I'm interested in the following scenarios:
- Single founder, cash contributions to the company.
- Multiple founders, equal cash contributions from each.
- Multiple founders, different cash contributions from each.
- Special concerns for non-cash contributions (e.g., computers, furniture, etc.)
Does any of this matter when it comes time to raise money or exit the company? Obviously, it's budget dust if you get a billion dollar valuation like Twitter, but what about in smaller startups?