Equity & Fundraising

SAFE - Simple Agreement for Future Equity (Pre-Money with Valuation Cap and Discount)

The current SAFE with a pre-money valuation cap and a discount. The investor pays now and converts at whichever of the two gives them more shares when you raise a priced round. Pre-money means the cap is measured before the new money goes in, so the SAFEs dilute each other rather than only the founders. Most investors expect the post-money form; use this one when the deal was agreed on pre-money terms.

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COVERS: SAFE
(Simple Agreement for Future Equity)
1. Events
and 16 more sections

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In plain English

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THIS INSTRUMENT AND ANY SECURITIES ISSUABLE PURSUANT HERETO HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED IN THIS SAFE AND UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM.

[Company Name]

SAFE

(Simple Agreement for Future Equity)

THIS CERTIFIES THAT in exchange for the payment by [Investor Name] (the “Investor”) of $[_____________] (the “Purchase Amount”) on or about [Date of Safe], [Company Name], a [State of Incorporation] corporation (the “Company”), issues to the Investor the right to certain shares of the Company’s Capital Stock, subject to the terms described below.

The “Discount Rate” is [100 minus the discount]%.

The “Pre-Money Valuation Cap” is $[_____________]. See Section 2 for certain additional defined terms.

1. Events

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