SESKStuff Everyone Should Know
SESK: Stuff Everyone Should Know · sesk.info/founder-safe-discount

What does a SAFE discount give an early investor?

A lower conversion price per share than new investors pay.

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  1. A lower conversion price per share ✔
  2. A fixed yearly interest rate
  3. A guaranteed cash dividend

Why: A discount reduces the price used when the SAFE converts in the later equity financing. A 20 percent discount means a conversion price 20 percent below the new investors' price.

Huh, didn't know that: An MFN SAFE has no cap or discount; it takes the terms of any SAFE the company issues later.

The dad joke
The early investor used a coupon because timing had its rewards.
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References

Answer: A lower conversion price per share. A discount reduces the price used when the SAFE converts in the later equity financing. A 20 percent discount means a conversion price 20 percent below the new investors' price.

  1. The SAFE www.ycombinator.com/safe
    A discount rate rewards earlier investors with a lower price than the price at the equity financing.
    Checked 2026-10-11.

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