SAFE AGREEMENTS

What is a safe agreement? 

SAFE- Simple Agreement for Future Equity.

Simple Agreement for Future Equity is referred to as a “SAFE.” 
It is a relatively new kind of contract that was developed in 2013 by the American startup accelerator Combinator.
It is a basic agreement that is frequently used as a type of finance contract that start-ups may utilize as a way to generate money during the initial phases of the business, popularly known as the seed financing stage.

According to Thomson Reuters , A new business may utilize a simple agreement for future equity (SAFE) finance arrangement to raise money during its seed funding rounds. Some people think of the instrument as a more founder-friendly substitute for convertible notes. 
A SAFE is an investment agreement between a startup and an investor that grants the investor the right to acquire equity in the company upon the occurrence of specific triggering events, such as: Future equity financing (also known as Next Equity Financing or Qualified Financing), which is typically led by an institutional venture capital (VC) fund.

References:

1. Y- Accelerator.com – (www.ycombinator.com )Author : Carolyn Levy published – September 2018(updated March 2021)
2. Thomson Reuters practical law- (Uk.practicallaw.Thomson Reuters.com)

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