The Simple Agreement for Future Equity (SAFE) was developed by Y Combinator, one of the most renowned American technology startup accelerators and venture funds. Introduced in late 2013, it has since become a primary tool for early-stage fundraising between venture capitalists and startups.
A SAFE is an investment contract that grants investors the right to receive equity in the company upon certain triggering events, such as:
- Future equity financing (known as Next Equity Financing or Qualified Financing), typically led by an institutional venture capital fund.
- Sale of the company.
The company's legal team has finalized the standard SAFE document, preserving previous terms while adding clauses that allow investors to receive a share of the company's profits from operations—dividends.
This structure ensures that investors maintain their stake in the company's capital while also benefiting from ongoing profits. This makes the investment offer particularly attractive in the venture capital market.