safe vs kiss

 KISS - Keep It Simple Security

A KISS (Keep It Simple Security) is a convertible security that allows the investment to convert into equity at a future event, such as a fundraising round or company sale.

two types

• Debt KISS: Includes accruing interest and a maturity date.
• Equity KISS: Has no interest or maturity date, similar to a SAFE.

SAFE-short for Simple Agreement for Future Equity

A SAFE (Simple Agreement for Future Equity) grants investors the right to convert their investment into equity (shares) during a future fundraising round, typically at a predetermined valuation or with specific terms.

3 types 

1. Discount rate and valuation cap: The lower of the valuation cap or the discount rate applies.
2. Discount, no cap: Only the discount rate applies.
3. No discount, cap: Only the valuation cap applies.

• Most Favoured Nation clause - MFN Most Favoured Nation (MFN) clause ensures investors receive the best terms offered in future rounds. For example, if an investor initially agrees to a 10% discount but later investors get 20%, the initial investor can match the better terms. KISS notes include MFN by default, while it is optional in SAFEs.