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.

Worth your time

Understanding SAFEs and Priced Equity Rounds Y Combinator · article From the people who invented the SAFE. Walks through caps, discounts, and how a note converts, in plain founder language.

Related terms

Valuation Cap Dilution Convertible Note
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