Simple Agreement For Future Equity)

A general misunderstanding is that SAFEs are standardized. Although YCombinator, the seed accelerator that created SAFEs, publishes standardized versions of the agreements on its site, these documents can and are modified by issuers. A lawyer is best placed to verify the SAFE in order to inform the investor of the effects of the specific document, such as: (1) the conditions of conversion, including the amount and conditions of conversion and the likelihood of such conversion; (2) the company`s buy-back rights and the company`s possible ability to prevent the conversion of the stake in exchange for the takeover of SAFE from the investor; (3) any rights of dissolution in the event of bankruptcy of the company before the conversion; and (4) the voting rights, if any, granted to the investor. The exact conditions of a SAFE vary.