4 ms·
What is a SAFE? Any newbie reads? I got the 7% equity part, but some examples could be useful for the code monks amongst us.
by throwawaybbqed 5y ago
What is a SAFE? Any newbie reads? I got the 7% equity part, but some examples could be useful for the code monks amongst us.
- feross 5y agoThis video "Understanding SAFEs and Priced Equity Rounds" from YC is a great resource: https://www.ycombinator.com/library/6m-understanding-safes-and-priced-equity-rounds https://www.ycombinator.com/library/6m-understanding-safes-a...
- sokoloff 5y agoIt’s a home-cooking (but I think accurate and clear) description: https://www.ycombinator.com/documents/ https://www.ycombinator.com/documents/
- devmunchies 5y agoBasically a contract that the investor will give you money now and be given equity in the next financing round in the future. S.A.F.E = Simple agreement for future equity It's like a "preorder for investors"
- fourseventy 5y agoIts a Simple Agreement to Future Equity. It's a fundraising instrument where the investor agrees to give the company money in exchange for some amount of equity to be decided at a future date. It's designed to make it easier for founders to get capital at the early stages without having to negotiate valuation.
- dlevine 5y agoPrior to the SAFE, a lot of startups raised using convertible debt, which had a bunch of strings attached (convertible notes typically have an interest rate, a cap, and a discount). SAFE was an attempt to make this simpler and more founder friendly.
- vl 5y agoThe best thing to do is to actually read SAFE templates, they are self-explanatory. Pretty much now these are standard instruments for early-stage investing for everyone, not only YC, so investor or founder you’ll see them a lot. https://www.ycombinator.com/documents/ https://www.ycombinator.com/documents/