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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Frequently asked questions
Use this SAFE Note if:
- You are a small or new business looking for investment, even if you are not generating revenue
- You are an investor that wants to avoid the need to do due diligence and research
What does this SAFE Note cover?
- Background
- Right to be issued Shares
- Qualifying Financing
- Exit Event
- Insolvency Event
- Termination
- Waiver of pre-emptive rights
- Adjustments
- Voting and other rights
- Compliance with law
- Representations of Company and Investor
- General considerations like notices, variation, assignment, etc
Further Information:
- Introducing SAFE notes: The revolutionary startup funding process
- Capital Raising: A Guide for Entrepreneurs
- What is a convertible note?
- How does Startup Valuation work?
View 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.
Articles about Simple Agreement for Future Equity (SAFE)
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