Most Favoured Nation Clause
Definition
A provision in a SAFE or convertible note that entitles the holder to adopt the terms of any subsequent convertible instrument issued to another investor on more favourable terms. A most favoured nation clause means that if the company issues a later SAFE with a lower valuation cap or a higher discount, the earlier holder can elect to convert their instrument on the same more favourable terms.
Common Misapplication
The most common misapplication is issuing multiple SAFEs with different terms without assessing the most favoured nation implications for earlier holders. A SAFE with a most favoured nation clause will automatically adopt the best terms of any subsequent SAFE, which must be reflected in the cap table model.
FFI Standard Reference
This term is defined and applied in Book 3, Section 3.2: The SAFE and Convertible Instrument Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Most Favoured Nation Clause. https://ffistandard.org/glossary/most-favoured-nation-clause/. 2026.