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Dictionary by pitch.dog
Funding instruments & exemptions · Core

SAFE

Also called: Simple Agreement for Future Equity

ELI5

An investment contract that usually turns into shares later.

Used in conversation

“The SAFE uses a post-money valuation cap.”

Definition

A simple agreement for future equity giving the investor a contractual right to receive equity under specified future events.

Here “SAFE” means: A simple agreement for future equity giving the investor a contractual right to receive equity under specified future events.

Pitch context

You will see “SAFE” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches funding instruments & exemptions.

Why it matters: In funding instruments & exemptions, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Connected terms

  • Convertible noteA SAFE is generally not debt and lacks maturity and interest; a convertible note is debt that may convert under its terms.
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Sources & evidence · 5

Direct term-level sources and supporting source families.