Understand how the SAFE SAFE Cap and Discount version of the Y-combinator post-money SAFE works. The legal terms explained line by line.

The shortcomings of SAFE notes are coming home to roost; ironically, entrepreneurs are paying the price. Y Combinator invented the notes with a noble goal: “we intend the SAFE to remain fair to both investors and founders.” But many SAFE notes that entrepreneurs are quick to issue now have a nasty bite: much more dilution than the issuers thought when they signed those documents.

Which is better for your startup a SAFE agreement or convertible note. It may seem as simple as comparing complex contracts with interest and debt vs. simpler, interest- and debt-free terms, but there is much more to understand as a founder before you decide.