MFN Clause (Most Favored Nation)

Definición

An MFN clause in a SAFE or note lets the investor adopt the better terms of any later instrument the company issues before conversion.

Uncapped SAFEs commonly carry MFN: the investor accepts no cap now, protected by inheriting any cap a later investor negotiates.

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.

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