It has the two features a SAFE lacks: interest, typically 2-8% a year, and a maturity date, usually 18 to 24 months out. Like a SAFE, it usually carries a valuation cap or a discount so the early investor converts on better terms than the round's new money. Unlike a SAFE, it is debt on your books until it converts, which changes both the legal position and the conversation if things slip.
The maturity date is the part founders underestimate. If the note matures and no qualifying round has happened, the holder can in principle demand repayment — a demand a young company usually cannot meet. In practice notes get extended, but that extension is a negotiation you enter from a weak position. Sophisticated investors rarely force the issue; less experienced ones sometimes do. Either way, know the date and start the conversation months before it, not the week of.
A concrete example: you raise $200,000 on a note at 5% annual interest with a $5,000,000 cap. Two years later you raise a priced round. The principal has grown with interest to roughly $220,000, and that full amount converts at the capped valuation rather than the round price. The investor gets shares for money they lent, plus the interest that accrued while they waited — which is exactly the deal you agreed, provided you tracked it.