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VENTURE-CAPITAL-BASICS4 MIN READ

Sort Startup Financing Instruments

Classify common financing features by whether they belong to SAFEs, priced preferred rounds, or debt-like instruments.

Drag each financing feature to the bucket where it most naturally belongs. SAFE conversion feature Priced preferred round feature Debt-like note feature Valuation cap used to set future conversion economics Discount to the next priced round conversion price Conversion when a later equity financing occurs Preferred stock issued at a negotiated price per share today Board seat or observer right negotiated with the financing Protective provisions requiring investor approval for major actions Interest accruing on invested principal before conversion or repayment Maturity date when repayment or renegotiation can become due Principal amount treated as a debt claim before conversion comparison

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