Topic: What is the main difference between a convertible note and a SAFE in startup funding?

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What is the main difference between a convertible note and a SAFE in startup funding?

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The main difference between a convertible note vs SAFE (Simple Agreement for Future Equity) lies in their structure and terms. A convertible note is a type of short-term debt that converts into equity during a future funding round, usually with interest and a maturity date. In contrast, a SAFE is not a debt instrument and does not include interest or a maturity date. Angel School explains that SAFEs are designed to simplify early-stage fundraising, while convertible notes provide more protection for investors through repayment terms and interest accrual.



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