4 clauses, plain English.
§1 Principal
Investor amount + wire date. Standard for single-investor or multi-investor rounds (multiple notes with same terms).
§2 Interest
5-8% standard. Accrued (not cash): added to principal at conversion. Simple interest typical.
§3 Maturity
18-24 months typical. Default action at maturity: convert at default valuation OR repay (negotiate up front).
§4 Conversion
Valuation cap + discount. Note holder gets shares at MIN(cap, discount) per-share price at next priced round.
Standard terms
Use as-is for straightforward rounds. Most YC-stage notes fit our template without major changes.
Attorney customization
For non-standard terms (MFN, side letters, anti-dilution, board observer), $549+ attorney-drafted version.
A clean handoff, in 4 steps.
Download free template
Word + PDF formats. Editable. Comments inline explaining each clause.
Set your terms
Principal amount, interest %, maturity months, cap, discount. Fill in the variables.
Counsel review for non-standard
For special terms (MFN, side letters, transfer restrictions), engage attorney for $549+ tailored version.
Sign + send funds
Sign + countersign. Investor wires. Note goes in BOS vault. Track until conversion.
One-time, or part of your BOS.
- Standard 4-clause template
- Cap + discount calculator
- Comments inline
- Lawyer-reviewed
- Disclaimer: complex deals → attorney
- 1-hour attorney consult
- Custom note drafted
- MFN + side-letter terms
- State + securities law review
- Multi-investor coordination
- 30 days post-close support
Common questions.
Note vs SAFE?
Note is debt (has interest + maturity). SAFE is not debt (no interest, no maturity). Both have cap + discount. SAFEs simpler, notes preferred when investors want maturity-date protection.
Why 8% interest?
Standard rate. Some rounds use 5-6% (founder-friendly), others up to 10% (investor-friendly). Above 10% raises usury concerns in some states.
Why 24-month maturity?
Long enough for company to reach next priced round; short enough for investor protection. Some rounds 18 months, some 36. Negotiated.
What happens at maturity if no priced round?
Default action per template: convert at most-favorable-to-investor price (cap-implied or discount-implied price), or repay principal + interest. Negotiate up front.
What's "MFN" (Most Favored Nation)?
Allows note holder to adopt better terms (lower cap, higher discount) from later notes in the same round. Common in seed rounds.
How is the cap calculated?
Pre-money cap (less common in 2026): cap excludes the round itself, more dilution to founders. Post-money cap (standard since 2018): cap includes the round, less dilution.
Can I use the template for a SAFE?
No: separate SAFE template. Different structure. Both available in our contract templates library.
What state law governs?
Template uses Delaware law as default (most common for VC-backed startups). Attorney customization can adjust for state-specific securities law.
Securities law concerns?
Notes are securities. Most rounds qualify for Reg D 506(b) (private offering to accredited investors). File Form D within 15 days of first sale. Attorney customization covers this.