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Are convertible notes / SAFEs unsecured debt typically? What makes a debt instrument "secured"?

J
Written by Jasmine Sunga
Updated over 5 years ago

Safes are basically always unsecured.

A security interest requires that a UCC statement (lien) is filed against the company’s assets.  A lender would negotiate the right to file this lien.  SVB and the like routinely do so in connection with their debt facilities.  Liens aren’t usually filed in routine Seed financings with convertible notes (at least not in the Bay Area).  You are them sometimes with bridge financings.

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