TL;DR: A most favoured nation (MFN) clause in a SAFE or convertible note lets an earlier investor automatically claim the better terms you give a later investor. If you offer a lower valuation cap to close a strong investor down the line, the MFN clause can pull that lower cap back to your earlier investors […]
Category Archives: Investment
28
May
May
TL;DR: A SAFE note review is a lawyer or advisor checking your Simple Agreement for Future Equity before you sign it. The terms that matter most are the valuation cap, the discount, whether it is pre-money or post-money, the MFN clause, and the conversion triggers. These quietly decide how much of your company you give […]
24
Feb
Feb
You’ve nailed the pitch. The investor is nodding. The chemistry is there. And then they say those five words every founder dreads: “Send over your legal docs.” This is where many promising startups stumble — not because of a bad business idea, but because of poorly drafted, incomplete, or missing agreements. Investors and their legal […]
23
Feb
Feb
Navigating startup funding can be daunting. Entrepreneurs often face a maze of options. Two popular choices are SAFE Agreements and Convertible Notes. These instruments are crucial in early-stage financing. They offer flexibility and delay valuation. But they differ in structure and implications. SAFE Agreements, introduced by Y Combinator, are simple and founder-friendly. They are not […]
30
Dec
Dec
You’ve built a product people love. You’ve got traction. Revenue is coming in. Now you’re raising funds. Then the term sheet arrives with one clause that makes your stomach drop: “Subject to satisfactory IP due diligence.” Suddenly, investors want to see proof that you actually own what you’ve built. And if you can’t prove it […]