Question
It is a disruptive and niche startup with an initial market of 4.5M. Scalable vertically and horizontally. Top category, such as food and technology. But without traction.
Answer
Convertible notes or Simple Agreements for Future Equity (SAFE) solve this and defer the valuation until you have traction. Standard agreements provide a 9-12+ month runway of capital for launch in exchange for a 20% discount to a priced equity round that you raise (sometimes with valuation that cap that places a minimum equity amount for these investors).
