SAFE Agreement Template (Simple Agreement for Future Equity)

SAFE AGREEMENT FAQ

What is a SAFE Agreement?

A SAFE (Simple Agreement for Future Equity) is a contract that allows investors to provide capital to a startup in exchange for equity at a later date, typically during a priced funding round. Unlike traditional convertible notes, it does not accrue interest or have a maturity date.

Why is a SAFE Agreement important?

It simplifies early-stage fundraising by avoiding lengthy negotiations and legal costs. Startups get quick access to capital, and investors receive equity later, often at a discounted rate or with a valuation cap.

When should you use a SAFE Agreement?

Use a SAFE Agreement in early-stage startup funding, especially when raising seed capital or bridging to a priced equity round. It’s best suited for fast-moving startups and investors comfortable with delayed equity.

What should a SAFE Agreement include?

It should include the investment amount, conversion mechanics, discount rates, valuation caps, treatment of liquidity events, and rights of the investor upon conversion.

How does a SAFE differ from a Convertible Note?

A SAFE does not carry debt features — there’s no interest or repayment obligation. A convertible note, by contrast, is debt that converts into equity under certain conditions.

Need a customized SAFE Agreement?

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