Summary of A Founder's Guide to Notes & SAFEs: Caps, Discounts & More | Dose 036

00:00:00 - 00:10:00

This video covers the basics of using convertible notes and safes to protect investors' interests, including the benefits of using a cap to limit the value of a startup in the next round. It also discusses the three situations in which an uncapped note may be more appropriate.

• 00:00:00 The video explains how convertible notes and safes work, and how investors typically view them. It explains that a cap places a ceiling on the startup's value in the next round, and that uncapped investments are risky.
• 00:05:00 The video discusses the benefits and drawbacks of caps on startup valuations. It argues that caps are beneficial to both founders and early investors, and that they help to align interests. The video also covers the three situations in which uncapped notes may come into play: when serial entrepreneurs with prior success are raising money from investors; when you need just a bit more runway to close a equity round; and with unsophisticated angel investors or a friends and family round.
• 00:10:00 This YouTube video provides a guide to using Notes & Safes to protect investors' interests, as well as various discounts and other benefits that can be applied to Notes & Safes.