Uncapped SAFE
Definition
An uncapped SAFE has no valuation cap: it converts at the next round’s price (sometimes with a discount), usually paired with an MFN clause protecting the investor from worse positioning.
How it comes up in fundraising
Uncapped SAFEs appear when founders hold strong leverage or in accelerator standard deals, like the $375K MFN portion of Y Combinator’s $500K.
Frequently asked questions
Why would an investor accept no cap?
Speed, access to a competitive deal, and MFN protection that grants them any better terms issued later.
Are uncapped SAFEs good for founders?
They defer pricing entirely and minimize dilution if the company appreciates fast; investors accept them mainly from clearly hot companies.
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