StartseiteSimple Agreement For Future Equity Option

SAFS can offer efficiency and usefulness by using a simple form. With fewer variables to understand and negotiate, terms can be agreed more quickly. A SAFE is similar to a convertible loan in that both investors have the right to obtain shares at a preferential price in the future. However, the two instruments are fundamentally different, as the convertible loan is debt, but not a SAFE. You should consider the following differences when choosing whether you want to create a convertible bond or a SAFE: Some issuers have offered a new type of collateral – which they have called safe – as part of some crowdfunding offerings. The acronym stands for Simple Agreement for Future Equity. These securities carry risk and are very different from traditional common shares. If a company generates enough capital not to need additional equity funding cycles, the amount invested under SAFE can never be converted into equity. At the end of 2013, Y Combinator published the Investment Instrument Simple Agreement for Future Equity (SAFE) as an alternative to convertible bonds. [2] Since then, this investment vehicle has become popular in both the United States and Canada,[3] due to its simplicity and low transaction costs. .