Search
  • Robert Dellenbach

Why do companies hesitate to use SAFEs?

Updated: Jun 26


A SAFE (Simple Agreement for Future Equity) is an efficient way for a company to raise pre-venture capital equity financing. As with convertible notes, SAFEs facilitate investment now while pushing off pricing until a future equity round of funding. SAFEs can provide for discounts on the next round price and valuation caps, but they are not debt. Sounds good, so why aren’t companies using them more? Because they are not confident that investors will understand SAFEs, companies often opt for the more traditional convertible note structures. In fact, SAFEs help both companies and investors by streamlining the investment process. To help educate potential investors, see Y-Combinator’s SAFE primer by clicking here.

#SAFE #SimpleAgreementForEquity #SAFE

21 views

Recent Posts

See All

Financing Forms

The following forms are publicly available for reference. Please consult counsel before using them. NVCA Venture Capital Documents YCombinator Series A Guide YCombinator Series A Term Sheet Series Se

© 2020 Dellenbach Venture Counsel.  All rights reserved.

The information contained in this website is for advertising purposes and does not constitute an attorney-client relationship.

The testimonials and endorsements included in this website do not constitute a guaranty, warranty or prediction regarding the outcome of any legal matter.

Dellenbach Venture Counsel has a principal office located at 2801 Waterman Blvd., Suite 270, Fairfield, CA 94534 USA

  • LinkedIn Social Icon
  • Google+ Clean
  • LinkedIn Clean