SAFE Note (Simple Agreement for Future Equity)
FinancialA streamlined investment instrument allowing startups to raise capital quickly without setting a valuation. Converts investor funds into equity upon a future priced round or liquidity event.
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A streamlined investment instrument allowing startups to raise capital quickly without setting a valuation. Converts investor funds into equity upon a future priced round or liquidity event.
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Key Clauses
- 1
Valuation Cap
Sets the maximum company valuation at which the SAFE converts to equity.
- 2
Discount Rate
Provides investors a percentage discount on the share price in the next round.
- 3
Conversion Events
Defines the triggering events that convert the SAFE into equity shares.
- 4
Pro Rata Rights
Grants investors the right to maintain their ownership percentage in future rounds.
- 5
Dissolution Terms
Specifies what happens to the investment if the company dissolves.
When You Need This
- Raising a pre-seed or seed round without a formal valuation
- An investor wants a simple instrument instead of a convertible note
- Closing funding quickly with minimal legal complexity
Frequently Asked Questions
What is a SAFE Note (Simple Agreement for Future Equity)?
A streamlined investment instrument allowing startups to raise capital quickly without setting a valuation. Converts investor funds into equity upon a future priced round or liquidity event.
What should a SAFE Note (Simple Agreement for Future Equity) include?
A comprehensive safe note (simple agreement for future equity) should include: valuation cap, discount rate, conversion events, pro rata rights, dissolution terms.
When do I need a SAFE Note (Simple Agreement for Future Equity)?
Raising a pre-seed or seed round without a formal valuation. An investor wants a simple instrument instead of a convertible note. Closing funding quickly with minimal legal complexity.
Is this template legally binding?
Templates provide a strong starting point, but we recommend having important agreements reviewed by a qualified attorney in your jurisdiction to ensure they meet local legal requirements.
Can I customize this template?
Yes — all bracketed [placeholder] fields can be replaced with your specific information. You can also add, remove, or modify clauses to fit your particular situation.
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