Why do investors compare SAFE vs convertible note before investing?

Posted in CategoryGeneral
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    Angelschool 8 hours ago

    Investors compare SAFE vs convertible note because each investment structure offers different levels of protection and potential returns. Convertible notes provide debt protection, earn interest over time, and include a maturity date, giving investors leverage if the company does not raise another funding round. SAFEs, on the other hand, eliminate debt complexity and convert directly into equity under agreed-upon terms. Investors choose between them based on risk tolerance, investment goals, and the startup's growth potential.

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