SAFE
Also called Simple Agreement for Future Equity
A short investment contract where someone gives you money now in exchange for shares later, when you next raise a priced round. It skips setting a valuation today, which is why early rounds use it.
Why it matters
The SAFE is how most pre-seed and seed money moves, especially via accelerators. Understanding its cap and discount, and how several stack up, is the difference between raising cleanly and being surprised by your own cap table later.
For example
Through YC, a founder raises 1.5 crore on SAFEs at a 15 crore cap, deferring the valuation until the priced seed round converts them into shares.
Go deeper
Related terms
Also in Starting Up
See how founders actually handle this on Raising your first round, part of the Starting Up hub.
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