Hacker News Reader

SAFEs are common in equity crowdfunding. Raises on Republic are often SAFEs. I'm not a fan.

They are also standard in early stage institutional equity funding.

Why are you not a fan of SAFEs ? Thanks.

To be clear, I don't like them from the perspective of equity crowdfunding, which has an alarmingly high percentage of low-information, follow-the-crowd, "dumb money" retail investors.

SAFEs muddy the waters. It's just another thing that already overwhelmed retail investors need to take into account when considering whether to invest.

https://www.finra.org/investors/insights/safe-securities

Thanks.

Agree, but are SAFEs any worse than a normal convertible?

As long as there isn't a secondary market on which to trade, then no, they aren't any worse. And right now, there isn't a good secondary market in the USA.

Would SAFEs be worse than normal convertibles if there were a good secondary market? Why?

Reply on news.ycombinator.com