Using convertible securities can lead to a larger number of investors in a startup, which can complicate administrative processes when seeking consent for future financing rounds.

Investors in convertible securities may write smaller checks and might not be as engaged as those who invest in priced rounds, which can affect the level of support and attention they provide to the startup.

In a non-priced round, investors often have a valuation cap that sets an upper limit on the company's valuation for future share conversions, rewarding early investors with more shares if the company grows significantly.

Most companies will raise money first on SAFEs or other convertible instruments, which can complicate understanding how much of the company has been sold.

In a priced round, the SAFEs convert into shares, and the option pool is often increased to accommodate new hires, which can dilute existing shareholders.

The lead investor in a priced round typically negotiates the creation of an option pool for new employees, which can dilute existing shareholders but not the new money being invested.

Convertible notes are great for quick fundraising, but equity is often preferable for larger amounts due to better management and oversight.

Convertible securities, which are not stock themselves but convert into stock later, are commonly used in early-stage fundraising events.

Many founders are shocked when investors agree to simple terms like signing a SAFE without demanding board seats or pro-rata rights, which contrasts sharply with their previous experiences.