SAFE

Definitions

1. Simple Agreement for Future Equity — a Y Combinator-created investment instrument where investors provide capital now in exchange for equity later (at the next priced round), with a valuation cap and optional discount. Simpler and cheaper than convertible notes — no interest, no maturity date, no debt.

   In plain English: A simple legal agreement where early investors give you money now and get shares later when you raise a bigger round.

   Example: "We raised $1.5M on a SAFE with a $10M cap — when we price the Series A, the SAFE converts at the lower of the cap or the round price."

Related Terms

• Term Sheet
• Due Diligence
• Series A
• Cap Table
• Convertible Note
• Drag Along
• Information Rights
• Public Benefit Corporation