The benefits of using SAFE notes are:
1. faster negotiations due to the simpler nature of the document; and
2. startups can close with an investor as soon as both parties are ready to sign and the investor is ready to transfer the investment amount (instead of trying to coordinate a single close with all investors simultaneously).
The downsides of SAFE notes are:
1. SAFE notes do not have maturity dates, so it is possible that a SAFE note will never convert into equity; and
2. SAFE notes restrict investors from transferring their rights under a SAFE note, so a SAFE note will be an illiquid investment until it is converted into shares (and even then, the investors will be subject to any pre-emptive rights contained in the applicable shareholders’ agreement or company constitution).