What is a Safe and what is a convertible note?
Safes and convertible notes are the most popular fundraising instruments used by early stage startups to raise capital from angel investors, venture capital firms and other accredited investors.
A convertible note is simply a promissory note that is convertible into stock. The note specifies when and on what terms the note converts into stock.
The Safe is a popular fundraising instrument developed by Y Combinator that resembles a convertible note, but does not have an interest rate or a maturity date. This simplifies things for both the company and for the investor. Like a convertible note, a Safe specifies when and on what terms the Safe converts into stock.