A simple agreement for Future Equity (SAFE) is an agreement between you and an investor (the founder) to get money now, in exchange for the promise that the investor will receive equity in your business at an undetermined time in the future, when your business holds a price round (for example. B, Series A). Note that this sounds like an error “this simple specific agreement for future capital with a “post-money valuation cap.” You need to hire a lawyer to change that if you make a note with a discount or a discount and a cap. The SAFE guide is only written with a cap, so I think they have a bias for cape documents. I guess they don`t want to create a template for every document. You then define how the proportional scenario calculation works in the heading scenario. That`s right: it`s the flesh of the document. Sponsor rights mean that an investor can retain his or her share of ownership. If they buy 10% (regardless of the final calculation method), it is in this financing cycle, if they are diluted by the serial investor and the new increase in ESOP, when they can invest more money and keep the diluted possession at 10%. Then they say that this document is as it is on the site, and you can not change anything that was not in a parenthesis. That does not make sense, because I do not understand why there would be no proportional reduction, reduction and cap. I assume that if you have hired a lawyer to amend this document, you will also remove that section. To determine which version is right for your business, you must first consider the amount of funds you want to spend on this cycle.
Pre-Money SAFE is usually the best option for small initial financing rounds. With Post-Money SAFE, you can closely monitor ownership and dilution changes during this fundraising round and in future rounds. You can also negotiate pro-rata rights. Post-Money SAFE is often the SAFE of choice for companies that are confident that their next round of fundraising will be the turn of action. The letter on the model page is only for the cape version of the SAFE models. If you want the pro-rata application to apply, you must hire a lawyer to adapt the conditions (and remove the part that indicates that the documents are as on the website of the y combinationizer). The investor cannot sell his proportional rights to someone without your permission. However, they can move rights under their corporate structure and between directors. So when we say that Jim is a partner who made the deal, but he stops and Mary takes over, she can still control the investment. We have a standard agreement for all our investments. We invest $1250,000 in a “post-money” agreement for future capital, and we enter into an agreement with the company and the founders that defines certain specific YC guidelines and rights, including a right to participate in future corporate financing cycles (the “YC agreement”).