What is SAFE (Simple Agreement for Future Equity)?
A financing contract used by startups to raise capital in their seed rounds. Developed by Y Combinator, a SAFE is an agreement where an investor provides capital to a startup today, in exchange for the right to receive equity at a later date (usually the next priced round). It is not debt, does not accrue interest, and has no maturity date.
Understanding SAFE (Simple Agreement for Future Equity) is critical for startup founders navigating the venture capital ecosystem. Whether you are actively fundraising or just planning your capital strategy, grasping these terms helps you negotiate better deals and find the right investment partners.
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