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Entrepreneurship & Startups vocabulary · Fundraising & Investors

SAFE

Meaning in entrepreneurship & startups, with examples

/seɪf/abbreviationAdvanced term

In entrepreneurship & startups, SAFE means: Simple agreement for future equity: a contract in which an investor gives money now and receives shares later, usually at the next priced funding round.

In Turkish: gelecekteki hisse için basit anlaşma, SAFE sözleşmesi

How it is used

Created by Y Combinator in 2013 and now common in early-stage rounds, especially in the US. A SAFE is not a loan: it has no interest and no maturity date. Its key terms are the valuation cap and the discount. People say raise on a SAFE or sign a SAFE.

Example sentences

  1. We raised our pre-seed round on a post-money SAFE with a 6 million cap.

  2. The SAFE will convert into preferred shares at our next priced round.

Common collocations

  • raise on a SAFE
  • post-money SAFE
  • sign a SAFE
  • SAFE with a valuation cap
  • convertible noteA short-term loan from investors that turns into company shares at a later funding round, usually at a discount, instead of being paid back in cash.
  • post-money valuationThe value of a company right after a funding round: the pre-money valuation plus the new money invested.
  • seed roundOne of the first official funding rounds of a startup, used to build the product, hire the first team and look for product-market fit.
  • angel investorA wealthy individual who invests their own money in very young startups, usually in exchange for equity, and often gives advice and contacts as well.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Fundraising & Investors

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