SAFE (Simple Agreement for Future Equity) vs Convertible Note - CompareYCs
Compare SAFE (YC Standard) and Convertible Notes: Founder Dilution, Accrued Interest, Legal Differences & Situational Recommendations for the US versus Europe. Free, pure client-side.
SAFE Configuration and Convertible Notes Settings
SAFE Simple Agreement for Future Equity (SAFE)
YCombinator Startup School 2018CNConvertible Bond
Debt instrument convertible into equityConversion Simulator
Based on the baseline of one million actions post conversion.
Secure Application Framework Environment
Convertible note
SAFE (Simple Agreement for Future Equity) vs Convertible Notes: Comparison Table
| I'm waiting | Secure Application Framework for the Enterprise (YC) | Convertible note |
|---|---|---|
| Struttura legale | Non è debito - diritto futuro su equity | Strumento di debito che si converte in equity |
| Interessi | Nessun interesse (0%) | 6% p.a. semplice |
| Scadenza (Maturity) | Nessuna scadenza - converte al prossimo round qualificato | 18 mesi |
| Complessità legale | Bassa - 5 pagine, standard YC, no negoziazione | Media - 15-25 pagine, clausole negoziabili |
| Clausola MFN | Inclusa (standard YC) | Non inclusa |
| Diritto pro-rata | Assente | Solitamente assente (negoziabile) |
| Trattamento IRS (US) | Non è debito: nessuna deducibilità interesse | Interesse deducibile come costo d'impresa (IRC §163) |
| Impatto contabile | Off-balance sheet (GAAP ASC 480) - non è passività | Passività in bilancio fino alla conversione |
| Investitori esteri (EU) | Alcune giurisdizioni EU non riconoscono il SAFE - rischio regolatorio | Strumento familiare in EU, Germania e Francia |
| Preferenza liquidazione | Rimborso cap in caso di M&A / liquidazione prima del round | Rimborso principal + interest in caso di default maturity |
Situation Recommendation
In questo scenario il SAFE genera una diluzione inferiore (55.56% vs 57.67% CN). Per startup US pre-Seed/Seed con investor experience YC o a16z, il SAFE è lo standard de facto: documentazione minima, nessun avvocato per chiudere, nessun interesse che matura. Raccomandata se gli investitori sono US-based e familiari al formato.
Come utilizzare SAFE vs Convertible Note - Comparatore YC
Configure Safe
Insert round size, valuation cap, discount and MFN/pro-rata terms in the SAFE column (standard Y Combinator).
Configure Convertible Note
Insert principal, valuation cap, discount, interest rate and maturity in the Convertible Note column.
Read side-by-side dilution
Compare issued actions, share price and founder's dilution percentage between SAFE and CN in the graphical simulator.
Consult table and recommendation
Scroll through the differences in legal tables and read the situational recommendation US vs EU generated based on your inputs.
Suggerimenti
- Use "Reset Default Values" to quickly return to the standard YC scenario and compare your hypotheses.
- Increase interest rate for CN to see immediate impact on accrued interest and final dilution.
- When working with European investors, prioritize the Convertible Note column in the legal differences table.
Domande frequenti
What is the main difference between SAFE and Convertible Notes?
The SAFE is a future equity contract with no interest or expiration date. The Convertible Note is instead a debt instrument that accumulates interest and has a maturity date by which the startup must close a qualified funding round or repay capital.
How is founder dilution calculated in the simulator?
The tool uses a baseline of 1 million existing actions prior to conversion. It calculates the conversion value (with matured interest for CN), divides it by the lowest price per share derived from valuation cap and discount, and obtains the new shares issued to the investor compared to the total post-conversion.
What does the MFN clause mean in this tool?
Most Favored Nation (MFN) gives the investor the right to adjust their terms to those more favorable offered to subsequent investors before qualification round. Activating it in the form will show its effect in the differences table.
Why does the Convertible Note have a "maturity" field and the SAFE doesn't?
Maturity is the deadline by which CN must convert to equity or be repaid: it's an intrinsic characteristic of debt. The SAFE does not foresee a deadline since it is not debt.
Do results from the comparator consider jurisdiction?
No: Calculations for dilution are generic and based solely on input parameters. The situational recommendation US vs EU is heuristic and does not substitute legal advice on a real term sheet.