SAFE Note Template & Convertible Note Template (2026)

An angel likes your pitch and says yes. Then the next message lands: "Great, send over the paperwork." At pre-seed, that paperwork is almost always a SAFE or a convertible note. Don't write it yourself, and don't pay a lawyer to draft one from scratch. The standard forms are free, and investors already know them. Below we show where to get each one and what to fill in. We explain every term in plain English and show how each one turns into shares, with real numbers. You can download YC's SAFE forms in one free pack, and run your own numbers in our free calculator.

A SAFE note template is a standard investment contract with blanks to fill in. The one most investors expect is Y Combinator's post-money SAFE, which is free. You add the investor, the amount, the date and the valuation cap or discount, and change nothing else. For a convertible note, Cooley's free Series Seed note does the same job.

Where can you get a free SAFE or convertible note template?

Get the SAFE from Y Combinator's website. There are three post-money versions, with a valuation cap, a discount or MFN terms, plus an optional pro rata side letter. For a convertible note, use Cooley's free Series Seed package. Cooley GO also builds both online, including UK and Singapore versions of the SAFE.

One rule matters more than any clause. Fill in the blanks and leave the rest alone. YC's SAFE says so on its first page: both sides confirm they haven't changed the form, apart from the blanks. If you edit it, every investor has to read the whole thing again, line by line. Be careful with copies on template sites too. Some rewrite YC's clauses in their own words, which throws away the point of a standard.

US founders can skip the Word file altogether. YC's free Send a SAFE tool fills in, signs and emails the form in about two minutes. It works for US-incorporated companies only.

Raising in the UK?

Cooley GO has a UK version of the YC SAFE for companies in England and Wales. But if your investors want SEIS or EIS tax relief, check the rules first. HMRC sets the same conditions for money paid ahead of shares under SEIS and EIS. The money can never be refunded, and the deal can't be changed. It can't charge interest. And it must turn into shares by a set date, as a rule within six months. A SAFE pays back on a shutdown and has no end date, and a note charges interest. That's why SEIS and EIS rounds use an advance subscription agreement (ASA) instead. Ask your lawyer which one fits your round.

SAFE and convertible note template: what do you fill in?

Very little. On YC's SAFE, you add the names, the amount and the date. Then come the state of incorporation, the governing law and the cap or discount. Cooley's note adds the interest rate, the maturity date and the smallest round that makes it convert. Everything else stays exactly as written.

Here are the blanks on both templates, and what to check before you fill each one in:

This isn't legal advice. The templates are free and standard, but have a lawyer review what you fill in before anyone signs.

What do the key terms in a SAFE or convertible note mean?

Six terms decide what an investor ends up with. The valuation cap sets the highest price they pay for shares. The discount gives them a cheaper price than new investors. MFN lets them copy better terms you give later. Interest and maturity apply only to notes. And a pro rata side letter lets them buy into your next round.

Valuation cap

The cap is the highest valuation at which the investor's money turns into shares. On a post-money SAFE, the maths is simple: the amount divided by the cap is the slice they've bought. Say an angel puts $250K into a SAFE with a $5M post-money cap. They've bought 5% of your company, as it stands just before your next round. If that round prices you below the cap, the cap doesn't matter. They simply buy at the round price.

On Cooley's convertible note, the cap works on a pre-money basis instead. That one word changes the price, as the worked examples below show.

Discount

A discount lets the investor buy at a lower price than the new investors in your next round. YC says SAFE discounts are commonly 10–20%. Say your seed prices shares at $2.00 and the SAFE carries a 20% discount. The SAFE holder pays $1.60, so each dollar buys a quarter more shares. If a SAFE or note has both a cap and a discount, the investor gets whichever price is lower.

MFN

MFN stands for most favoured nation. An MFN SAFE has no cap and no discount. Instead, it can take the better terms of any SAFE you sign later. Say your first angel signs an uncapped MFN SAFE in March. In June, you sign another SAFE with a $12M cap. The March investor can now take the $12M cap too. YC's advice is to close your lower-cap SAFEs before you hand out an uncapped MFN (YC).

Interest

Only notes charge interest, because a note is a loan. Usually, the interest isn't paid in cash. It builds up and converts into shares along with the loan. Say you raise $500K on a note at 6% simple interest, and your seed closes 18 months later. By then $45K of interest has built up, so $545K converts. Carta's median note rate was 7% in early 2025.

Maturity

Maturity is the date a note's loan falls due. A SAFE doesn't have one. For a note, it's your deadline to raise the next round. If you miss it, the note's wording decides what happens. In Cooley's form, a majority of the noteholders can then ask for their money back. Or, if you chose that option, the note turns into shares at the cap. So pick a date you're confident you'll beat.

Pro rata side letter

YC keeps pro rata rights out of the SAFE itself. They sit in a short, optional side letter. It lets the investor buy part of your next priced round, in line with their stake. Say a SAFE holder ends up owning 10%. The side letter lets them buy up to 10% of the new shares in that round. Every pro rata allocation shrinks the room for your new lead investor. YC's user guide suggests ways to ration it, such as a minimum cheque size.

Want the mechanics in more depth? Our guides to the SAFE note and the convertible note cover pre-money vs post-money SAFEs, note maturity and when to use each.

How does a SAFE convert? A worked example

At your first priced round, a post-money SAFE turns into shares at the lower of two prices. One is the cap price: the cap divided by all the shares before the new money, the SAFE's own shares included. The other is the round price, less any discount. Then the round dilutes the SAFE holder like everyone else.

Say a fictional startup has 10 million shares. The founders hold 9 million, and 1 million sit in an unused option pool. Angels invest $1M on YC's post-money SAFE with a $10M cap. That buys them 10% of the company, fixed on the day they sign.

A year later, a seed fund invests $4M at a $16M pre-money valuation. It wants an unused option pool of 10% after the round. As in YC's own examples, that pre-money counts everything: the founders, the SAFE shares and the bigger pool.

The SAFE converts at $0.90 a share. That's the $10M cap divided by 11.1 million shares: the 10 million from before, plus the SAFE's own 1.1 million. The seed fund pays $1.38 a share. Here's the cap table once the round closes:

Two things stand out. The SAFE's 10% became 7.7%, because the seed dilutes SAFE holders too. And the founders dropped from 90% to 62.3% in one step. The SAFE, the new money and the pool top-up all land on the same day. So model the conversion before you sign the SAFE, not when the term sheet arrives. Our term sheet guide covers the rest of that round.

How does a convertible note convert? A worked example

A convertible note turns into shares at your next qualifying round. The loan and the interest built up both convert. They convert at the lower of the cap price and the round price minus the discount. If you haven't raised by the maturity date, the note's wording decides whether you repay it or it converts.

Take the same fictional startup and the same seed round. This time the $1M comes in as a convertible note, with 6% simple interest, a $10M cap and a 20% discount. The seed closes exactly a year after the note is signed.

1. Interest — a year at 6% adds $60K, so $1.06M converts.
2. Cap price — $10M divided by the 10 million shares before the round is $1.00. As in Cooley's form, the shares the note itself creates don't count.
3. Discount price — the seed price is $1.39, and 80% of that is $1.11.
4. Conversion — the lower price wins, so the note converts at $1.00. The holder gets 1,060,000 shares, 7.4% of the company after the seed.

The note holder ends up with less than the SAFE holder did, 7.4% against 7.7%, even with the interest. The reason is the cap. A $10M post-money cap counts the SAFE money inside the $10M. A $10M pre-money cap doesn't. So the same headline number gives the SAFE investor a lower price.

Which price wins depends on how your next round is priced. Here is the same $1M on both instruments at three seed valuations:

At a low price, the cap does nothing. This SAFE has no discount, so it buys at the round price like everyone else. The note's discount kicks in and wins it a bigger slice. At higher prices, both caps take over. The free calculator runs your own numbers, with up to five SAFEs and three notes in one round.

One more difference is time. A SAFE can wait as long as it takes. A note falls due on its maturity date, so a slow raise turns into a negotiation with your noteholders. If you're bridging to a round that's already in sight, our guide to bridge rounds covers the options.

What terms are normal in 2026?

In 2026, the standard pre-seed deal is a post-money SAFE with a valuation cap and no discount. Convertible notes have shrunk to a small share of rounds. Caps have kept rising, especially at the top of the market. If your terms sit close to the medians in the table below, you're on the standard path.

Carta tracks the SAFEs and notes that US startups record on its platform, and its 2026 data is clear. SAFEs now dominate pre-seed. They made up 93% of pre-seed rounds in the second quarter. Convertible notes fell to a record low in the first quarter. Nearly every SAFE is now post-money, and nearly every post-money SAFE has a cap. A discount is the exception, not the rule. Caps keep rising too, especially at the top of the market. Notes haven't disappeared. Carta sees them most often in energy, biotech and medical devices, and they still charge interest. One caveat: this is US data from one platform. In the UK, investors who want SEIS or EIS relief need an advance subscription agreement instead.

How much dilution is healthy?

In our partners' experience, healthy dilution is about 10% at pre-seed, 15–20% at seed and 18–20% at Series A. Your SAFEs or notes make up the pre-seed slice. So $1M on a $10M post-money cap already uses the whole 10%. A second round of SAFEs pushes you past it before the seed is even priced.

Keep the round as small as your next milestone needs, and get the materials right before you start. Waveup prepared the investor materials for a Middle Eastern beauty brand's $500K pre-seed round. It closed three weeks after the first investor meetings, above its $400K goal (see the case). In 2026 so far, our clients have raised $49M across 15 pre-seed and seed rounds.

We prepare the investor materials and support the whole process as part of a fundraising engagement, together with your lawyer. For round-by-round benchmarks, see our guide to startup dilution per round.

What should you check before you sign a SAFE or convertible note?

In our work on 600+ successful rounds since 2014, the costly mistakes are rarely in the legal text. They're in the numbers and the paperwork around it. Check the cap against your next round and add up every SAFE. Know your note's maturity date. Get board approval, and log every instrument in your cap table. Then have a lawyer review it.

Record each SAFE in your cap table tool on the day the money lands. And one last time, because it matters: this isn't legal advice. Use the official forms, fill in the blanks, and have a lawyer licensed where your company is formed review them.