At this point Time Hayden had done as much as he could with his personal credit cards and using his own cash. Now he needs $1 million to go to the next phase. He was able to get half of that through four corporations if he could raise the other half himself. He presented to a number of venture capitalist, however, it was his parents, friends and other who knew of him or one of the other investors.

1. Why might investors want a convertible note instead of getting stock in a start-up?
2. From the standpoint of the smaller investors, what are the advantages or disadvantages of having a single large investor (like one of the entertainment companies) along with the smaller ones?
3. If the large firms decide not to invest, what are the options available to Tim and how likely will he be to raise the capital needed?
4. Finally, what do you think is the answer to Tim’s question – what could go wrong now?