Chapter 3 · Deal Mechanics

SAFEs, Convertible Notes & Priced Rounds

Early-stage rounds use lightweight instruments (SAFEs and convertible notes) so both sides can close in a week instead of a month. Later rounds use priced equity. You need to know the difference between these three and exactly what each one does to the cap table when it converts. Pre-money vs post-money SAFEs especially trip people up, including people two rounds in. We'll go through it.