But we were talking about a post that originally wrote: "but in the worst case with the convertible note, the investor gets their money back", i.e. that this would be their 'worst-case scenario'.
But far from it. It is extremely rare for debt to be repaid instead of converting, and even if it did, that would be a terrible outcome (and not in the way the OP meant.) Nobody wants their convertible debt to be repaid! (As debt).
They want the company to grow big, or die trying. Really.
You dismiss the notion of precision in the <Legal> sense. Which is what we are talking about here. EG
But precision isn't really required, because it is a huge mistake to think that investors use <lawyers>.
The problem with the earlier discussion is that it confuses concepts (zero, non-zero returns) and actions (investments made, not made) etc.
The precision needed simply relates to the classes of actions taken (or not) as well as the classes of contracts negotiated (or not), in other words.