MFN Clause (Most-Favored Nation)

MFN Clause (Most-Favored Nation)

A SAFE provision that lets an early investor adopt more favorable terms if the startup issues later SAFEs on better terms.

What MFN Clause (Most-Favored Nation) means

The MFN clause protects early SAFE holders from being outmaneuvered by later investors who negotiate a lower cap or bigger discount. If the company issues a later SAFE with better terms, the MFN holder can elect to swap into those terms.

MFN is standard on the YC post-money SAFE. It rarely comes up in practice, but it exists so early investors don't need to reopen the SAFE every time you raise more.

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