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Equity Crowdfunding — YC SAFE note terms review

Started by anon_trader_CO · Aug 22, 2025 · 831 views · 16 replies
For informational purposes only. This is not legal advice. Laws vary by jurisdiction. Consult a qualified attorney for advice specific to your situation.
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anon_trader_CO OP

I'm dealing with a situation and need some guidance.

YC SAFE note terms review. I've been dealing with this for about 6 months now and the situation isn't improving.

I have already tried to resolve this directly but did not get a clear answer.

What are my legal options here? Is it worth pursuing?

DS
DevOps_Seattle

Not a lawyer, but I have direct experience with this.

The biggest mistake people make in this situation is hiring an attorney to send the initial letter. I'd recommend being patient with the process instead.

CT
CryptoTrader_2023

Been there. Here's what I learned.

In my case, it took about 2-4 months to resolve. The key was hiring an attorney to send the initial letter.

TL
Mod_TermsLaw Moderator

I practice in this area. Here's my take on the legal issues.

The key question is whether the applicable statute of limitations has run. Depending on your jurisdiction, you typically have the relevant statute years for this type of claim.

One important thing — there are strict deadlines for filing these claims. Don't wait too long.

DS
DevOps_Seattle

Been there. Here's what I learned.

What worked for me was having everything documented. It took 3-6 months but was worth it.

CP
confused_parent_NY

This happened to me too. Have you tried filing a complaint with the relevant agency? In my case they investigated and it got resolved without needing a lawyer.

HM
help_me_dev_today

I work in this industry and unfortunately this is very common. The good news is that when people actually push back with legal representation, companies usually settle.

PB
PatentAgent_Boston

Not a lawyer, but I have direct experience with this.

In my case, it took about 3-6 months to resolve. The key was having everything documented.

GL
GigWorker_LA

I've dealt with this before.

The biggest mistake people make in this situation is having everything documented. I'd recommend keeping a detailed timeline instead.

TC
throwaway_contractor_NC

Just want to point out — the statute of limitations might be a factor here. In some states it's as short as 1-2 years. Don't sit on this too long.

CA
ConsumerAdvocate

Not a lawyer, but I have direct experience with this.

In my case, it took about 3-6 months to resolve. The key was having everything documented.

WP
worried_parent_NC

Following this thread — I'm in a very similar situation. Would love to hear how it turns out.

SM
SeniorDevMike_PDX

Not a lawyer, but I have direct experience with this.

In my case, it took about 2-4 months to resolve. The key was hiring an attorney to send the initial letter.

PN
PreSeedFounder_Nadia

Using YC's standard post-money SAFE for our pre-seed round. Raising $500K on a $5M cap. Two investors want 'most favored nation' (MFN) clauses. Should I agree?

VS
VCatty_Scott Attorney

@PreSeedFounder_Nadia — MFN clauses in SAFEs give the investor the right to adopt the terms of any subsequent SAFE that has better terms (lower cap, higher discount). For a standard pre-seed round, MFN is generally acceptable and common — it protects early investors from being disadvantaged if you later issue SAFEs at a lower valuation cap. The risk: if you later need to raise a bridge round at a lower cap (down round scenario), all MFN holders can convert at the lower cap, increasing dilution. For a $500K raise on a $5M cap, MFN is standard and I'd accept it. Where I'd push back: if investors want MFN plus additional terms (pro-rata rights, information rights, side letters) that aren't in the standard YC SAFE. Keep the round clean — standard YC SAFEs with MFN only.

BC
BankingComplaint

Just want to share a positive outcome: after 3 months of back and forth, the company finally agreed to a full refund plus compensation for my time. The turning point was when I mentioned I'd be filing a complaint with the FTC. Document your communication timeline — it shows persistence and seriousness.