To provide some background, I am currently advising an early stage SaaS company that is looking to do the first round of financing. They do not have revenue and are in the process of setting up the minimum viable product (MVP) as well as bringing onboard critical team members in order to start executing on the vision. For the most part such members have engineering backgrounds. The company is based out of the East Coast in the US.
My question here is really concerning the structure and strategy of their financings as they build the business and plan to scale things up. Regardless of them getting a lead or putting together a syndicate to cover the initial round... What are your thoughts with regards to the advantages as well as disadvantages from doing a Seed round via an equity financing vs. doing the Seed round with convertible notes with standard terms. How would this change upon the next round (Series A)?
Many thanks for the help!