Is Impact Worldwide a SCAM?

What impact would rising interest rates worldwide have on startup investing in Silicon Valley or in any startup ecosystem?

• India's central banking economist just raised interest rates, signalling a potential worldwide / developing market increase in rates, as a predictive move against the US Fed's inevitable tapering of securities buying. What would this rise in rates do to private investing like startup / VC Investing? http://qz.com/126875/the-economist-who-predicted-the-financial-crisis-just-sounded-another-alarm-it-would-be-wise-to-listen-this-time/#!

• Answer:

  It changes the discount rate and alters the risk reward equation. Interest rates would have to rise significantly to affect traditional VC/Angel financing. It might affect convertible debt as the coupon on the convertibles would rise, accrued interest would be larger and so would  the conversion amount. Those issuing the convertible instrument might ask for a large conversion discount. The affect is in seed capital - convertible instruments are often used to seed a startup.