Simple Agreement for Future Equity (SAFE)
A Simple Agreement for Future Equity (SAFE) Note is an innovative form of convertible security that enables small businesses and startups to raise capital while postponing valuation.
Last updated February 3, 2025
Suitable for Australia
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What is a simple agreement for future equity (safe)?
What is a simple agreement for future equity (safe)?
When should you use a simple agreement for future equity (safe)?
When should you use a simple agreement for future equity (safe)?
What should be in a simple agreement for future equity (safe)?
What should be in a simple agreement for future equity (safe)?
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Frequently asked questions
Who is best suited to use this document?
keyboard_arrow_upWhat protections does this agreement offer investors?
keyboard_arrow_upAre there any limits or risks for investors?
keyboard_arrow_upHow does the valuation cap and discount rate work?
keyboard_arrow_upWhat events trigger conversion of the investment to shares?
keyboard_arrow_upWhat are the key steps after signing this agreement?
keyboard_arrow_upDoes this agreement work across Australia?
keyboard_arrow_upView Sample Simple Agreement for Future Equity (SAFE)
The Legal Risk Score of a Simple Agreement for Future Equity (SAFE) Template is Medium
Our legal team have marked this document as medium risk considering:
- The document allows the company to avoid issuing shares if it would trigger regulatory requirements or takeover provisions, potentially limiting the investor's ability to capitalize on their investment under certain regulatory conditions.
- If the company undergoes any form of insolvency, the investor's ability to recover their investment is prioritized, but only to the extent that the company's assets cover the invested amounts, which might not fully protect the investor's financial interests in a worst-case scenario.
- The investor's rights to influence company decisions through voting or other shareholder activities are not recognized until shares are actually issued, which may leave the investor without a say in company matters for an indeterminate period.
- The document must be signed as a deed in order to be effective.
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Articles about Simple Agreement for Future Equity (SAFE)
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