Equity & Fundraising

SAFE Pro Rata Side Letter

Y Combinator's optional companion to the post-money SAFE. It grants an investor the right to purchase its pro rata share of the preferred stock sold in the equity financing in which the SAFE converts, so the investor can keep the ownership percentage their SAFE converts into. Investors who plan follow-on investments are the ones who ask for it; each letter reserves a slice of your next priced round, so grant it deliberately.

Customize This Document Already have an account? Sign in

Pairs with SAFE (Simple Agreement for Future Equity) - Post-Money with Valuation Cap Only.

SAMPLE PREVIEW

Read a preview now. Create a free account to customize this document. A paid membership is required to complete and download it.

In plain English

Create a free account and Arabella explains any clause here.

[COMPANY NAME]

PRO RATA AGREEMENT

This agreement (this “Agreement”) is entered into on or about [Date of Safe] in connection with the purchase by [Investor Name] (the “Investor”) of that certain simple agreement for future equity with a “Post-Money Valuation Cap” (the “Investor’s Safe”) issued by [Company Name] (the “Company”) on or about the date of this Agreement. As a material inducement to the Investor’s investment, the Company agrees to the provisions set forth in this Agreement. Capitalized terms used herein shall have the meanings set forth in the Investor’s Safe.

Create a free account and Arabella explains any clause here.

Customize This Document

This is a professionally drafted starting point, not legal advice for your specific situation. Using it does not create an attorney-client relationship.