# Maturity Date

## Quick Definition

The deadline by which a convertible note must be repaid or converted to equity.

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## What is Maturity Date?

Maturity date is when a convertible note comes due. If the note hasn't converted by then, the company technically owes the principal plus accrued interest as debt.

## What Happens at Maturity?

Options include: automatic conversion at cap valuation, note extension, repayment (rare for startups), or negotiated resolution. Most investor-friendly notes convert rather than demanding repayment.

## Maturity Risk

Hitting maturity without raising can create leverage for note holders. Some may demand unfavorable conversion terms. Set maturity 18-24 months out to allow time for your next round.

### Formula

Typical maturity structures:

- Term: 18-24 months  
- Extension: Often 6-12 months automatic or by mutual agreement  
- Auto-convert: At cap if qualified financing doesn't occur

### Example

Note terms: $400K, 18-month maturity, $6M cap.

- **Scenario 1**: Raise Series A at month 12.  
  Note converts at Series A terms with discount/cap.
- **Scenario 2**: No raise by month 18.  
  Note converts at $6M cap valuation (forced conversion).  
  Founder avoids debt repayment but at predetermined terms.

## Related Terms

### [Most Favored Nation (MFN)](/content/terms/most-favored-nation-mfn/index.html)  
A provision guaranteeing an investor will receive terms at least as favorable as any subsequent investor receives.

### [Qualified Financing](/content/terms/qualified-financing/index.html)  
The minimum raise amount that triggers automatic conversion of convertible notes or SAFEs.

### [Accrued Interest](/content/terms/accrued-interest/index.html)  
Interest that accumulates on convertible notes over time, typically converting to additional equity.

## Learn More About Maturity Date

### [Fundraising SAFEs and Form D: The Fundraising Paperwork Founders Get Wrong](/content/blog/safes-and-form-d-fundraising-paperwork-founders-get-wrong/index.html)  
When to raise on a SAFE, when you have to file a Form D, and the 506(b) vs 506(c) decision that quietly shapes who you can talk to about your round.

### [Fundraising How Multiple SAFEs Dilute Your Cap Table](/content/blog/safe-stack-multiple-safes-cap-table-dilution/index.html)  
Learn how stacking multiple SAFEs with different valuation caps creates unexpected dilution. Discover the conversion mechanics most pre-seed and seed founders miss.