# YC Post-Money SAFE — MFN (Most Favored Nation)

**Template version:** YC Standard (2018 revision)
**Suitable for:** Pre-product, angel rounds, early believer investments
**Recommended when:** You want to close fast without setting valuation terms

---

## Key Terms Summary

| Term | Value |
|------|-------|
| **Type** | Simple Agreement for Future Equity (SAFE) |
| **Post-money or pre-money** | Post-money |
| **Valuation cap** | None |
| **Discount rate** | None |
| **Interest rate** | None |
| **Maturity date** | None |
| **MFN clause** | Yes |
| **Conversion trigger** | Equity Financing (priced round) |

---

## What MFN Means

**Most Favored Nation (MFN)** means: if the company issues any future SAFEs with a valuation cap or discount, the MFN investor can elect to have their SAFE amended to match those terms.

**In plain English:** "We don't know what we're worth yet, but we promise that whatever terms we give future SAFE investors, you'll get at least as good."

**Example:**
- Angel invests $50K on an MFN SAFE in January
- Six months later, you issue a $2M SAFE with a $6M valuation cap
- Angel's $50K MFN SAFE holder can now elect to amend their SAFE to include the $6M cap
- Or they can keep the MFN SAFE as-is (converting at the equity financing price, with no cap)

---

## Why Founders Like MFN SAFEs

1. **Speed** — No negotiation over valuation. Close in days, not weeks.
2. **No cap to defend** — You're not anchored to a number you chose at day zero.
3. **Flexibility** — Early believers get fair treatment without locking in terms.

## Why Investors Accept MFN SAFEs

1. **Protection** — They can't get worse terms than future investors.
2. **Trust signal** — Founders who offer MFN are being straightforward.
3. **Simple** — No cap table modeling needed at signing.

---

## When MFN Gets Complicated

If you issue many MFN SAFEs and then raise a capped round, every MFN holder has the right to amend. This creates administrative overhead. Manageable, but track it.

Also: if you raise your priced round at a very high valuation with no cap, MFN holders get no special benefit — they convert at market price like everyone else.

---

## Template Document

```
SIMPLE AGREEMENT FOR FUTURE EQUITY

THIS CERTIFIES THAT in exchange for the payment by [INVESTOR NAME] (the "Investor")
of $[PURCHASE AMOUNT] on or about [DATE], [COMPANY NAME], a [STATE] corporation
(the "Company"), hereby issues to the Investor the right to certain shares of the
Company's capital stock, subject to the terms described below.

MFN PROVISION: Yes

1. MOST FAVORED NATION

If the Company issues any Subsequent Convertible Securities prior to the
termination of this instrument, then the Company shall promptly provide the
Investor with written notice thereof, together with a copy of all documentation
relating to such Subsequent Convertible Securities.

Following receipt of such notice, the Investor may elect to amend this instrument
to be identical to the form of Subsequent Convertible Securities by providing
written notice to the Company within 30 days of receipt of the Company's notice.

"Subsequent Convertible Securities" means convertible securities that the Company
may issue after the date of this instrument with the principal purpose of raising
capital, including but not limited to, other SAFEs, convertible promissory notes
and other convertible debt instruments.

2. EVENTS

(a) Equity Financing. If there is an Equity Financing before the expiration or
termination of this instrument, on the initial closing of such Equity Financing,
this instrument will automatically convert into shares of SAFE Preferred Stock
at the price per share of the Standard Preferred Stock sold in the Equity
Financing.

[NOTE: No cap, no discount — converts at the round price unless MFN is triggered]

[FULL DOCUMENT CONTINUES — CONSULT YOUR ATTORNEY FOR THE COMPLETE VERSION]
```

---

## Before You Sign

Upload your MFN SAFE to [Robaer.ai](https://robaeros.polsia.app/review) for an AI review that will:
- Verify the MFN clause is correctly scoped
- Check for any non-standard amendments to the standard YC language
- Flag if investor has added conversion triggers beyond the standard
- Confirm the "Subsequent Convertible Securities" definition is fair

**This template is for educational purposes. Consult a qualified attorney before signing any investment document.**