SAFE vs. Convertible Promissory Note
Brett Cummings
611

A few quibbles:

A convertible noteholder can also be strong armed.

A SAFE is simpler — because it is a widely known form… even if it is modified for a particular investment. I am not aware of a form of convertible note that is widely known. (A SAFE is also shorter than a typical convertible note + purchase agreement but the difference is modest.)

It is very common to modify the SAFE to specify a minimum fundraising amount that triggers the conversion. (I also add some short additional reps that help ensure the company isn’t reckless.)

Convertible promissory notes are unsecured but they do have a maturity date and can wreak havoc (perhaps justifiable havoc) on that date.

(I’ve got other problems with SAFEs but convertible notes doe’t solve those problems.)

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