Safe Agreement Sample

As the security of a single flexible document without many trading conditions, start-ups and investors save money in legal fees and reduce the time spent negotiating investment terms. Startups and investors generally have only one point to negotiate: the valuation cap. Since a safe does not have an expiry date or maturity date, no time or money should be spent on extending maturities, reviewing interest rates or otherwise. Paul Graham and yCombinator recently created and publicly recommended the use of FAS in convertible bonds. For more information about SAFEs here: ycombinator.com/safe/. While this concept is consistent with the original concept of SAFE notes, it has not made sense in the world where SAFes have become independent funding cycles. Thus, the old proportional right was removed from the new SAFE notes. But there is a new model letter that offers investors a proportional right in financing the stock series both on the basis of investors as a safe property transformed, which is also now much more transparent. All the details have been added, as in the picture.

Some fields are not visible at first. However, if you add the details in accordance with the agreement, the fields will be displayed. Once you`ve filled in all the details, click “Send.” Our updated safes are post-money safes. By “post-money” we say that the safe owner is measured by post, all the safe money is accounted for – which is now his own trick – but before (before) the new money in the price cycle that transforms and dilutes the coffers (normally series A, but sometimes the Seed series). The post-money safe has what we think is a great advantage for founders and investors – the ability to calculate immediately and exactly how much property the company has been sold. For the founders, it is essential to understand how much dilution is caused by each chest they sell, just as it is fair for investors to know how much they have bought ownership of the business. In 2013, startup accelerator Y Combinator (a Silicon Valley accelerator) introduced an instrument known as a Simple Future Capital Agreement (SAFE). It was created as a simpler alternative to traditional convertible bonds. It allows startups to easily structure their upfront capital assets, with no maturities or interest rates.

Keep reading to find out everything you need to know about SAFE notes and the secure model before the money. There are four versions of the new post-money safe as well as an optional letter of receipt. Although the safe may not be suitable for all financing situations, conditions must be balanced with the interests of the start-up and investors in mind. As with the original safe, there are always trade-offs between simplicity and completeness, so that while not all Edge cases are addressed, we believe that the safe covers the most relevant and common issues. Both parties are encouraged to have their lawyers` safes checked if they wish, but we believe it provides a starting point that can be used in most situations without change. We believe in our first-hand experience, seeing and helping hundreds of companies raise funds each year, as well as the thoughtful feedback we received from founders, investors, lawyers and accountants with whom we shared the first designs of the post-money safe. Whether you`re using the safe for the first time or are already familiar with safes, we recommend reading our Safe User Guide. The Safe User Guide explains how the safe converts with sample calculations, as well as other details on the secondary letter pro-rata, explanations of other technical changes we made to the new safe (for example. B the language of tax processing) and suggestions for optimal use.