YC Standard SAFE Templates
YC SAFE

Post-Money SAFE — Valuation Cap

The most common SAFE for US seed rounds. Investor gets equity at a capped valuation when the company raises a priced round. No interest, no maturity date. Most founder-friendly of the three.

Key Terms
Conversion trigger Next equity financing
Valuation cap Negotiated (e.g. $10M)
Discount rate None
Interest None
Maturity date None
Post-money calculation Cap ÷ (cap + investment)
YC SAFE

Post-Money SAFE — Discount Only

Investor converts at a discount to the next round's price — no valuation cap. Good for pre-product rounds where a cap would be arbitrary. Discount is typically 10–20%.

Key Terms
Conversion trigger Next equity financing
Valuation cap None
Discount rate Negotiated (e.g. 20%)
Conversion price Round price × (1 − discount)
Interest None
Maturity date None
YC SAFE

Post-Money SAFE — MFN (Most Favored Nation)

No cap, no discount — but the investor gets the right to match the best terms offered to any future SAFE investor. Used for pre-product or pre-revenue investments where valuation is unclear. Cleanest for founders, best for speed.

Key Terms
Conversion trigger Next equity financing
Valuation cap None
Discount rate None
MFN clause Yes — matches future SAFE terms
Interest None
Maturity date None
Convertible Note

Standard Convertible Note

A debt instrument that converts to equity at the next round. Unlike a SAFE, it accrues interest and has a maturity date. Common for founders with existing investor relationships. More complex — and more negotiating surface area.

Key Terms
Conversion trigger Qualified financing or maturity
Valuation cap Negotiated
Discount rate Typically 15–25%
Interest rate Typically 4–8% per year
Maturity date 18–24 months typical
On maturity (no raise) Repay or convert at cap

SAFE vs. Convertible Note — what actually matters

SAFEs don't accrue interest

A SAFE is not debt. There's no interest clock ticking. You're exchanging a future equity promise for cash now. No repayment obligation, no maturity pressure.

Post-money cap = real dilution math

With a post-money SAFE, the investor's ownership percentage is fixed at signing. $500K on a $5M cap = exactly 10% at conversion, regardless of your SAFE stack size.

MFN is for early believers

Use MFN SAFEs when you have a supporter who wants to invest before you've set terms. If you later issue a capped SAFE, they can elect to match those terms.

Convertible Notes carry risk at maturity

If you don't raise a priced round before the note matures, the investor can demand repayment. SAFEs have no maturity — less pressure, simpler structure.

Have a SAFE to review?

Upload your agreement and get an AI analysis in under 60 seconds. We'll flag deviations from YC standard, model cap table impact, and catch what's missing.

📄 Review a SAFE Agreement — Free