Term sheet clause 25 of 25 · SAFEs and convertible notes
Interest and maturity (notes) in a term sheet
In plain English: Notes accrue interest and have a repayment date. Typical: Low interest; maturity 18-24 months with conversion options.
Founder-friendly
Long maturity, converts at maturity.
Investor-friendly
Repayment on demand at maturity.
What to watch for
Red flag
Short maturity with mandatory repayment.
How to model it
Don't judge this clause by reading it; put numbers on it. In our workbooks it's modelled in Convertible Notes, so you can see what it changes in your ownership or your payout before you agree.
Not legal advice. Norms vary by country and market cycle. Have a startup lawyer review your term sheet before you sign.