可转换债券,是一种在天使投资人和初创企业中很流行的投融资方式,在A轮融资完成后,可转换债券会自动转换成公司股票,有时这些债券会包含估值上限(valuation cap)和/或贴现(discount)条款。 在种子融资中使用可转换债券最大的优势在于简单(with no complications),平均每笔可转债交易只需5到7页合同就能完成,耗时较短,...
Discount, no cap:Has no cap and contains a discount when the note converts. Cap and discount:Has both a valuation cap and a discount. MFN, no cap, no discount:Has no cap, no discount, but does contain the most favored nation principle. When the SAFE note converts to equity, the fun...
Valuation cap only; Discount rate only; Both valuation cap and discount rate (investors get to choose which is more favorable upon conversion); and “Most Favored Nation” clause (no valuation cap or discount rate: SAFE holders get conversion terms based on the most favorable terms offered to ...
There are four main types of SAFE: (1) valuation cap, (2) discount, (3) valuation cap + discount, and (4) most favored nation (MFN). They are defined by how you calculate the amount of equity received by the SAFE holder(s) upon conversion. The SAFE holders’ investment amount is ...
To mitigate the risk of an issuance of a SAFE note, most are structured with features such as a valuation cap or discount rate, ensuring favorable terms upon conversion, i.e., “downside protection”. The absence of a fixed repayment schedule and obligation to issue interest periodically remove...
The point of notes coming into practice was to avoid the valuation dispute in the first place. The discount will mean something when the priced round is lower than the cap — a down round. If that happens, everyone will miss out. Many startups are raising notes with 5 million caps but...
That being said, SAFE notes often come with a valuation cap, which limits the maximum price at which the investment can convert into equity. Sometimes, they may come with a discount, which provides a percentage reduction off the share price during the next financing. What Is Equity Financing...
Be prepared for potentially challenging negotiations in later rounds due to deferred valuation decisions. Be aware of how multiple SAFEs can dilute your equity. Regularly update and review your cap table, especially after each round of SAFE notes, to keep track of potential ownership changes. ...
A SAFE generally has a valuation cap, discount rate, or both, which could determine how much equity the investor receives during a conversion event. Need help with other finance or startup questions? Pilot provides bookkeeping, CFO, and tax services for literally thousands of startups and grow...
they can be adapted for use in later funding rounds. The key is to tailor the SAFE terms to suit the more mature stage of the company by adjusting the valuation cap and discount rate to reflect the company’s growth and