SAFE
Definition
SAFE: A SAFE (Simple Agreement for Future Equity) is an investment contract that gives investors the right to receive equity in a future priced round. Created by Y Combinator, SAFEs are simpler and cheaper than convertible notes, with no interest or maturity date.
Example Usage
“We raised $500K on a post-money SAFE with a $10M cap, which converted in our seed round.”
Common Misconceptions
Origin: Created by Y Combinator in 2013
Related Terms
Convertible Note
A convertible note is a form of short-term debt that converts into equity during a future financing round. It includes interest, a maturity date, and...
Valuation
Valuation is the estimated worth of a company at a given point in time. Pre-money valuation is the company's value before receiving new investment, wh...
Pre-Seed
Pre-seed is the earliest stage of startup funding, typically used to validate an idea, build an initial prototype, or conduct customer discovery. Pre-...
Seed Round
A seed round is typically the first official equity funding stage for a startup, used to develop the product, hire initial team members, and validate...
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