safes (simple agreements for future equity)

What Are the Key Terms in a SAFE?


Valuation Cap: The maximum valuation at which the SAFE will convert into equity. This benefits the investor by potentially giving them a lower price per share.
Discount Rate: A percentage discount on the price per share at the next financing round. This ensures the investor gets a better deal than new investors.
Conversion Trigger: The event that causes the SAFE to convert into equity, typically the next equity financing round.
Pro Rata Rights: The right for investors to maintain their ownership percentage in future financing rounds by purchasing additional shares.

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