January 23, 2024 - For investors, SAFEs don’t provide immediate ownership in the company. This means investors won’t have equity or voting rights until the SAFE converts, which might not happen if the company doesn’t survive until its later funding round. If the startup fails before the conversion event, SAFE investors may end up with nothing.

A SAFE is an investment contract between a startup and an investor that gives the investor the right to receive equity of the company on certain triggering events, such as a:

A SAFE or safe stands for a “simple agreement for future equity”. This document was authored by Y Combinator lawyer Carolynn Levy and open sourced. It was created and published as a simple replacement for convertible notes.

October 10, 2025 - A simple agreement for future equity (SAFE) is an agreement between an investor and a company that provides rights to the investor for future equity in the company similar to a warrant, except without determining a specific price per share at the time of the initial investment.

June 11, 2024 - A SAFE is a convertible instrument commonly used as a form of consideration in a pre-seed, seed or seed+ round of capital. It is essentially a contract between an early-stage company and an investor who agrees to provide a specified amount of equity at a certain point or specified event in the future, following investment in the company.

1 month ago - Here's a step-by-step breakdown of how SAFEs typically work: The investor provides funding to the startup in exchange for the right to convert that funding into equity at a later date. The conversion is triggered by a specific event, such as a future round of financing or an acquisition of the startup. This means that the investor's funding will convert into equity only if and when the triggering event occurs.

A key aspect of a SAFE is that it does not create or reflect any debt between the parties. In practice, a SAFE is an agreement that can be used between a company and an investor. The investor invests money in the company using a SAFE.

November 12, 2024 - Unlike traditional convertible notes, SAFEs do not accrue interest, and they do not have a maturity date by which the company must repay or convert the investment. This structure allows startups to secure funding without the immediate need to set a valuation, which can be difficult for early-stage companies. SAFE agreements generally convert into equity when the startup raises a “qualified financing” round, meaning a priced equity round, typically led by institutional investors, with a pre-set minimum threshold.

A SAFE is a Simple Agreement for Future Equity. It is a contract between an investor and a company that gives the investor the right to receive equity in the company at a future date for the cash contribution done now, typically in connection ...

A Simple Agreement for Future Equity (SAFE) is an agreement made between an early-stage startup and a VC or angel investor. Investors pay money now and receive shares of company stock later. Read more.

January 26, 2024 - SAFE agreements differ significantly from traditional equity and debt financing. Unlike equity financing, where investors immediately receive company shares, SAFE does not involve immediate stock issuance. This means there's no immediate equity dilution or valuation requirement.

1 month ago - When fundraising with SAFEs, however, you don’t give investors anything right away; instead, you promise them future shares of stock in exchange for their investment today. There are two key differences between SAFEs and convertible notes: debt and conversion times. Debt: A convertible note is a type of convertible instrument (like a SAFE), meaning it converts into equity at a particular time.

September 25, 2024 - The maturity date is the date when ... initial investment). Not having a maturity date takes time pressure off founders, who no longer need to scramble to raise a priced equity round or negotiate repayment or an extension with convertible note holders. Interest rates. The convertible note interest rate indicates how much interest accrues before the note must be repaid or converted to equity. SAFEs remove this ...

Information about startup documents, including the safe (simple agreement for future equity).

May 22, 2025 - SAFE notes are simple and fast, ... It is a type of convertible security, similar to an option or warrant, which grants the investor the opportunity to purchase shares of preferred stock in a future priced round...

February 20, 2024 - A Simple Agreement for Future Equity (SAFE) is a contractual agreement between a startup company and its investors. It exchanges the investor's investment for the right to preferred shares in the startup company when the company raises a future ...

A SAFE — or Simple Agreement for Future Equity — is a financial instrument that was first introduced by Y Combinator in 2013. Since that time, SAFEs have become the most common instruments used in early-stage venture capital investments.

For example, if an investor contributes $100,000 through a Pre-Money SAFE with a valuation cap of $1 million, and your company's valuation at the next financing round is $2 million. Then, the investor's SAFE would convert as if the company was valued at $1 million. This means the investor would receive a larger share of equity for their initial investment.

August 16, 2024 - Learn the difference between pre-money and post-money SAFEs (Simple Agreement for Future Equity) and how each can impact your equity ownership.

September 5, 2024 - The SAFE note is a legally binding agreement that allows an investor to buy shares at some point in the future, usually when the startup has a subsequent funding round, and usually at a valuation less than a particular amount (the valuation ...