SAFE
Simple Agreement for Future Equity. An investor gives you money now in exchange for shares later, when a priced round happens.
Why it matters
Fast and cheap, with no interest and no maturity date. The risk is stacking several with different caps and losing track of what you have actually sold until the priced round converts them all at once.
A worked example
Four SAFEs totalling $2M at caps between $6M and $12M can convert into materially more than the 15% a founder assumed, because each converts at its own cap.
What is typical
The post-money SAFE is now standard. Model your full SAFE stack before signing the next one, not after.
Related terms
Valuation cap
The maximum valuation at which a SAFE or convertible note converts into equity.
Read more →Discount
A percentage reduction on the priced round share price, given to early money as compensation for earlier risk.
Read more →Run your raise on this
VCTerminal models these terms on your real cap table, so you can see what a term sheet pays you before you sign it.
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