Overview
The Simple Agreement for Future Equity (“SAFE”) is an entrepreneur-friendly and simple mechanism for startups to obtain funding in early stages, such as seed financing rounds. As an agreement between an investor and a startup, a SAFE gives the investor the right to receive equity of the company on certain triggering events, e.g., a future equity financing round. It was introduced by the startup accelerator Y Combinator in late 2013 as an alternative to convertible loan agreements and has since then become popular in the U.S. and Canada.
