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Simple Agreement for Future Equity (SAFE): Cap, no Discount

Purpose

Key Questions: What is a SAFE with a valuation cap and no discount rate? What are the required elements of this type of SAFE agreement? 

This tool provides a template for a Simple Agreement for Future Equity (SAFE) with a valuation cap and no discount rate, also known as a "Standard SAFE" and can be adapted to suit your organization's needs. 

A safe is a Simple Agreement for Future Equity. An investor makes a cash investment in a company, but gets company stock at a later date, in connection with a specific event. A safe is not a debt instrument, but is intended to be an alternative to convertible notes that is beneficial for both companies and investors.  

Contents

  • Simple Agreement for Future Equity
  • 1. Events
  • 2. Definitions
  • 3. Company Representations 
  • 4. Investor Representations
  • 5. Miscellaneous
  • Signatures 
Contact Person/Organization: 

Y Combinator 

Type of Tool:

Publication Date: 
2016
Videos: 

SAFE Financing Docs: SAFE & Convertible Notes Explained - AngelKings.com

What is a valuation cap?