MFN Clause (Most Favored Nation)
Definition
An MFN clause in a SAFE or note lets the investor adopt the better terms of any later instrument the company issues before conversion.
How it comes up in fundraising
Uncapped SAFEs commonly carry MFN: the investor accepts no cap now, protected by inheriting any cap a later investor negotiates.
Frequently asked questions
How does an MFN SAFE work in practice?
If a company later issues a SAFE with a $10M cap, earlier MFN holders convert as if they had that cap too.
Where do founders encounter MFN terms?
Accelerator standard deals and early uncapped checks; track them carefully because they change conversion math retroactively.
Round Funded resources
Put this term to work
Definitions win negotiations only when you are in one. Find the investors who fund your stage and start the conversation.
Browse the investor database