The SAFE is a simple instrument that we invented to replace convertible notes. It's designed to make seed funding faster, simpler, and more founder-friendly.
A SAFE (Simple Agreement for Future Equity) is an investment contract that provides for an investor to receive equity in a company at a future priced round of investment. The investor pays money to the company today, and gets company shares in the future when a specific triggering event occurs.
SAFEs are used by startups to raise capital in seed financing rounds. They were designed by Y Combinator as a replacement for convertible notes, offering a simpler and more founder-friendly alternative.
The key benefits of SAFEs include: no interest, no maturity date, standardized terms, and faster execution compared to traditional convertible notes.
No complex terms, interest rates, or maturity dates. Close your round in days, not weeks.
No board seats, voting rights, or control provisions. Founders maintain control of their company.
Industry-standard documents that investors know and trust. No need for expensive legal negotiations.
The most common SAFE structure with a valuation cap but no discount rate.
SAFE with discount rate but no valuation cap for later-stage companies.
SAFE with both valuation cap and discount rate for maximum investor protection.
Most Favored Nation SAFE that matches terms of future SAFEs.
All SAFE documents are available under Creative Commons license.
Need help understanding SAFEs? Read our guide →Investor gives money to the company in exchange for the right to receive equity in a future priced financing round.
SAFE converts to equity when the company raises a priced round, is acquired, or reaches an IPO (liquidity event).
SAFE converts to preferred stock at either the valuation cap or discount rate, whichever is more favorable to the investor.
SAFEs are simpler than convertible notes because they don't have interest rates, maturity dates, or debt components. They're pure equity instruments.
While legal review is always recommended, SAFEs are standardized documents designed to minimize legal fees and complexity.
SAFEs include provisions for liquidity events like acquisitions or IPOs. In these cases, SAFE holders receive their pro rata share.
We recommend using the standard SAFE documents without modifications to maintain their simplicity and investor familiarity.
Download our SAFE documents and start raising capital with the industry standard.