There are four versions of the new post-money safe as well as an optional letter of receipt. While this concept is consistent with the original concept of SAFE notes, it has not made sense in the world where SAFes have become independent funding cycles. Thus, the old proportional right was removed from the new SAFE notes. But there is a new model letter that offers investors a proportional right in financing the stock series both on the basis of investors as a safe property transformed, which is also now much more transparent. Note: In this example, we used the SAFE: Valuation Cap, No discount used. Some issuers offer a new type of security as part of some crowdfunding offers they have called safe. The acronym means Simple Agreement for Future Equity. These securities are risky and very different from traditional common shares. As the Securities and Exchange Commission (SEC) states in a new investor newsletter, despite its name, a SAFE offer cannot be „simple“ or „safe.“ These are the basics of how a SAFE works. More information can be found in Y Combinator`s start-up documents, which contain a bonus on FAS, as well as examples of documents containing different provisions. Note that there are many flavors and conditions that can be added or modified from the documents on the YC website.
As the security of a single flexible document without many trading conditions, start-ups and investors save money in legal fees and reduce the time spent negotiating investment terms. Startups and investors generally have only one point to negotiate: the valuation cap. Since a safe does not have an expiry date or maturity date, no time or money should be spent on extending maturities, reviewing interest rates or otherwise. SAFThe early stages of fundraising save investors and startups time and money they would otherwise spend to develop unique legal agreements. It is a brief five-page document that describes all the details.