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. In practice, a SAFE enables a startup company and an investor to accomplish the same general goal as a convertible note, though a SAFE is not a debt instrument.
A SAFE is an agreement that can be used between a company and an investor. The investors invest money in the company using a SAFE. In exchange for the money, with a SAFE, the investor receives the right to purchase stock in a future equity round (when one occurs) subject to specific parameters set in advance in the SAFE (e.g., valuation cap).
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. In practice, a SAFE enables a startup company and an investor to accomplish the same general goal as a convertible note, though a SAFE is not a debt instrument. A SAFE is an agreement that can be used between a company and an investor. The investors invest money in the company using a SAFE. In exchange for the money, with a SAFE, the investor receives the right to purchase stock in a future equity round (when one occurs) subject to specific parameters set in advance in the SAFE (e.g., valuation cap).