SAFE agreement generator
A simplified template based on the Y Combinator post-money SAFE. For the original (with all legal nuances), see ycombinator.com/documents. Not legal advice — have a lawyer review.
{{org_name}}
SAFE (Simple Agreement for Future Equity)
THIS CERTIFIES THAT in exchange for the payment by {{inv_name}} (the “Investor”) of {{purchase_amt}} (the “Purchase Amount”) on or about the date hereof, {{org_name}}, a {{org_state}} corporation (the “Company”), hereby issues to the Investor the right to certain shares of the Company’s Capital Stock, subject to the terms set forth below.
The “Post-Money Valuation Cap” is {{cap}}.
The “Discount Rate” is {{discount}}%.
1. Events
(a) Equity Financing. If there is an Equity Financing before the termination of this Safe, on the initial closing of such Equity Financing, this Safe will automatically convert into the number of shares of Safe Preferred Stock equal to the Purchase Amount divided by the Conversion Price.
The “Conversion Price” will be the lower of (i) the Safe Price and (ii) the Discount Price. The “Safe Price” means the price per share equal to the Post-Money Valuation Cap divided by the Company Capitalization. The “Discount Price” means the price per share of the Standard Preferred Stock sold in the Equity Financing multiplied by (1 − the Discount Rate).
(b) Liquidity Event. If there is a Liquidity Event (sale, merger, IPO) before termination, the Investor will, at its option, either receive (i) a cash payment equal to the Purchase Amount or (ii) the number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price (Post-Money Valuation Cap divided by the Company Capitalization).
(c) Dissolution Event. If a Dissolution Event occurs before termination, the Company will pay the Investor an amount equal to the Purchase Amount.
(d) Termination. This Safe will automatically terminate immediately following (a) the conversion of this Safe in an Equity Financing, (b) the payment under Section 1(b), or (c) the payment under Section 1(c).
2. Investor Representations. The Investor is an accredited investor as defined under applicable securities law, is purchasing the Safe for its own account, and is aware that the Safe involves substantial risk including potential loss of the entire Purchase Amount.
3. Company Representations. The Company is duly organised, validly existing and in good standing under the laws of {{org_state}}.
4. Miscellaneous. Amendments require the written consent of the Company and the Investor. This Safe shall be governed by and construed under the laws of {{org_state}}.
IN WITNESS WHEREOF, the undersigned have executed this SAFE as of the Effective Date.
COMPANY: {{org_name}}
INVESTOR: {{inv_name}}