Free template
SAFE Agreement (Simple Agreement for Future Equity)
Secure startup investments with this SAFE Agreement Template for future equity conversion.
Downloaded 2644 times
SAFE Agreement Template
This SAFE Agreement (“Agreement”) is entered into on [Date], by and between:
Company (Startup): [Full Legal Name / Company Name]
Address: [Address]
Contact: [Phone, Email]
Investor: [Full Legal Name / Company Name]
Address: [Address]
Contact: [Phone, Email]
1. Investment Amount
The Investor agrees to provide $[Investment Amount] to the Company in exchange for the right to certain shares of the Company’s Capital Stock, subject to the terms outlined herein.
2. Conversion to Equity
The investment will automatically convert into shares of Capital Stock upon the Company’s next Equity Financing round, at either:
The price per share determined by applying a [Discount %] to the valuation in such round, or
The price per share based on a Valuation Cap of $[Valuation Cap].
3. Liquidity Event
If a Liquidity Event (merger, acquisition, or IPO) occurs before conversion, the Investor will receive either:
A cash payout equal to the investment amount, or
The right to convert into shares immediately prior to the event, at the Investor’s discretion.
4. Dissolution Event
If the Company dissolves or ceases operations before conversion, the Investor shall be entitled to repayment of their investment from remaining assets, after debts and obligations are settled.
5. Investor Rights
The Investor acknowledges that this SAFE does not grant immediate ownership or voting rights. Rights are limited to those explicitly provided under this Agreement.
6. Representations and Warranties
By the Company: The Company has authority to enter into this Agreement and issue equity upon conversion.
By the Investor: The Investor is an accredited investor (if required) and has the capacity to bear the risk of investment.
7. Miscellaneous
Governing Law: This Agreement shall be governed by the laws of [State/Country].
Entire Agreement: This Agreement represents the entire understanding and supersedes all prior negotiations.
Amendments: Any modification must be in writing and signed by both Parties.
Signatures
Company: ___________________________ Date: _________
Name/Title: [Full Name, Title]
Investor: ____________________________ Date: _________
Name/Title: [Full Name, Title]
Details
Learn more about
SAFE Agreement (Simple Agreement for Future Equity)
SAFE AGREEMENT FAQ
What is a SAFE Agreement?
A SAFE (Simple Agreement for Future Equity) is a contract that allows investors to provide capital to a startup in exchange for equity at a later date, typically during a priced funding round. Unlike traditional convertible notes, it does not accrue interest or have a maturity date.
Why is a SAFE Agreement important?
It simplifies early-stage fundraising by avoiding lengthy negotiations and legal costs. Startups get quick access to capital, and investors receive equity later, often at a discounted rate or with a valuation cap.
When should you use a SAFE Agreement?
Use a SAFE Agreement in early-stage startup funding, especially when raising seed capital or bridging to a priced equity round. It’s best suited for fast-moving startups and investors comfortable with delayed equity.
What should a SAFE Agreement include?
It should include the investment amount, conversion mechanics, discount rates, valuation caps, treatment of liquidity events, and rights of the investor upon conversion.
How does a SAFE differ from a Convertible Note?
A SAFE does not carry debt features—there’s no interest or repayment obligation. A convertible note, by contrast, is debt that converts into equity under certain conditions.
Need a customized SAFE Agreement?
Use our AI-powered builder to create a tailored SAFE Agreement in minutes—professional, legally compliant, and ready for investment.
Similar templates
