A SAFE (Simple Future Equity Agreement) is an agreement between an investor and an entity that grants the investor rights for future capital to the company similar to a warrant, unless, without determining a specific price per share at the time of the initial investment. The SAFE investor receives the futures shares in the event of an evaluated investment cycle or liquidity event. SafThe aim is to offer start-ups a simpler mechanism to seek start-up financing as convertible bonds. Dilution and property values were an informed choice rather than a safe calculation. This is the reason why safe post-money banknotes were created. To assess dilution and ownership, you need to remove the theoretical increase in shares and take into account the issued convertible bonds. In principle, here you can calculate the price per share into which the SAFE investor`s money is converted. This is a simple problem of division, in which the valuation ceiling is divided by the capitalization of companies. SAFS safs streamline fundraising at an early stage and save investors and startups time and money that they would otherwise spend on developing unique legal agreements. It is a short five-page document that sketches out all the details. Valuation limits are the only negotiable detail in a SAFE.
Note that we have not been involved in the development of these forms and that we are not necessarily in favour of a form or the use of these forms in general or in any particular case, as all of them have their advantages and disadvantages and are only the opinion of an organization on what a standard “contract” document is or should be.