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Information about startup documents, including the safe (simple agreement for future equity).
It can't say that it's the same as the SAFE that's on the Y Combinator website, and so you'll know as a founder that you should be looking at it more closely to see what's been changed. So, this is just something to keep your eyes open for if you receive a SAFE from an investor.
YC partner (and lawyer) Carolynn Levy has created a new alternative to convertible notes, called a safe, that has the advantages of convertible debt without some of the disadvantages.
Y Combinator introduced the safe (simple agreement for future equity) in late 2013, and since then, it has been used by almost all YC startups and countless non-YC startups as the main instrument for early-stage fundraising.
POST-MONEY SAFE USER GUIDE. In this User Guide, the new version of the safe is referred to as the “new safe,” “post-money safe,” “Standard Safe” or simply “safe.”. The original version of the safe replaced by the new safe is referred to exclusively as the “original safe.”.
YC’s $125k Safe will convert in the priced round into 7% of the company’s equity (including any existing option pool) after all the Safes and other convertible instruments have converted in conjunction with the priced round.
This Quick Start Guide will show how to take advantage of this structure for the most common use cases. For an in-depth discussion of the structure and features of the safe generally, please review the rest of the Post-Money User Guide that follows.
Series A Term Sheet Template. A Standard and Clean Series A Term Sheet. While working with companies in YC’s Series A program we’ve noticed a common problem: founders don’t know what “good” looks like in a term sheet. This makes sense, because it is often, literally, the first time in their careers that they’ve seen one.
This Safe constitutes a valid and binding obligation of the Investor, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and general principles of equity.
Y Combinator