Union Square Ventures founder Fred Wilson wrote that deferring valuation and dilution amounts with safes harm founders in the long run.
Safes,pre-seed or seed rounds commonly use the safe
They're not squabbling about whose startup is worth more, or whose fund posted better returns. The source of strife is something called a"safe," a specialized type of investment in early-stage companies that has become increasingly prevalent in recent years, much to the dismay of some longtime VCs.and called safes fundamentally flawed and unfair to founders.
"They can build up, like a house of cards, on top of each other and then come crashing down on the founder at some point when a priced round actually happens," Wilson wrote. The difference is that the safe is pure equity, whereas a convertible note is"fundamentally a debt instrument," according to Levy.
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