How to fund product development with a cafe note?

[rajat]

I’m researching how to fund product development with a CAFE note.
How does a CAFE note work for early-stage startup funding?
What are the risks and benefits of using a CAFE note?

 

[Rick_Grimes]

By raising money from early investors, a SAFE note (which is often mistakenly referred to as a "cafe note") can be used to fund product development. These investors give you money upfront in return for the right to convert their investment into shares at a later funding round, typically with a valuation cap or discount, which allows you to get the money you need fast without having to set a company valuation early on.