Most Favoured Nation (MFN)

A clause entitling an investor to any better terms granted to comparable investors within a defined scope.

Example

An angel on a 6,000,000 cap automatically receives the 4,500,000 cap offered to later investors in the same round.

Check which investors and terms it covers, and whether the company must notify you when better terms are granted.

Side Letter — A separate agreement between a company and an individual investor granting rights that are not in the main investment documents.
Valuation Cap — The maximum company valuation a SAFE or convertible note's conversion price can be based on, protecting the early investor from paying a later round's higher price.

A few clauses in a few contracts can decide an exit — Legal diligence reviews the company's most important customer, supplier and partner contracts for clauses that transfer risk or restrict future options: change of control, exclusivity, most-favoured pricing, uncapped liability and easy termination. (11 min)
You will not set the price, but you can ask for the three things that matter — Small investors join rounds on terms the lead negotiated. What remains negotiable is usually information rights, pro-rata rights and a most favoured nation clause - and those are worth asking for every time. (10 min)
A side letter is where your specific rights live, and MFN is how you avoid being the worst-treated investor — Side letters grant individual investors rights outside the main documents. A most favoured nation clause entitles you to any better terms given to comparable investors in the same round. (10 min)