Does anyone have experience negotiating SAFE notes (convertible debt)?

by a searcher from Case Western Reserve University

1 year ago

My team and I have about $600,000 left (of $2 million total startup) to raise using convertible notes.

Looking for any tips or best practices associated with using SAFE notes. 

What do investors think of SAFE notes?
What would an investor rather see: lower valuation cap, higher discount, or something else?
What factors are most important in structuring convertible debt deals?
Any tips for managing multiple investors with static-round funding instruments like convertible debt?

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4 comments

professional from The Johns Hopkins University

Hi Dalton -- Good luck with the raise! My firm reps both companies and investors. In general, if I am on the investor side, I try to steer those clients away from SAFEs. They are efficient in concept only - particularly as they are increasingly modified by counsel which is contrary to the rationale behind creation. The utility can also be impacted by other vehicles in play in other rounds. Happy to discuss as needed.

1 year ago | like reply | 1 like

searcher from Western University

My experience in Angel investing in southern Ontario is that SAFEs are generally not liked, modified SAFEs seem ok if they offer some protection for investors

1 year ago | like reply | 0 likes

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