What is SAFE Financing?
The Simple Agreement for Future Equity (SAFE) is a standardized financing instrument used by some startups to raise capital in early stage financing rounds. The SAFE was invented in 2013 (and updated and re-released in 2018) by Silicon Valley incubator, Y-Combinator, as an alternative financing instrument to convertible notes and series seed preferred equity: two early stage fundraising instruments also favoured by Angel Investors.
Must be incorporated.
Must have an organized and up-to-date minute book.
Up to $500,000 in convertible equity investment.
Up to 5 Canadian investors.
Learn more about Basic SAFE Financing.
Up to $1,000,000 in convertible equity investment.
Up to 10 Canadian investors.
Learn more about Complex SAFE Financing.
What is the process?
Book a call: Pick a time to discuss your SAFE Financing with a Good Lawyer. They'll help you determine if it’s the right investment solution for you.
Design your SAFE Financing: Work with your Good Lawyer to design a SAFE Financing that meets your business’s and investors’s needs. You might need to negotiate with your investors on the deal, especially if other investors are exercising their right to seek independent legal advice.
Draft your SAFE contracts: Work with your Good Lawyer to prepare a SAFE investment contract for each participating investor (up to 5 investors, maximum).
Secure the bag: Once you and your investors agree on the deal and your lawyer has prepared a SAFE investment contract for each of your initial 5 participating investors, it’s up to you to collect signatures and get that money!
Book a free demo to learn more:
When is SAFE Financing typically used?
SAFE Financings are a sophisticated way to raise capital from investors who understand the startup financing framework. They are ideal for early-stage startups to use in bridge round financing when there is high likelihood of rapid growth leading to Venture Capital interest and financing.
They were not originally intended to be used for independent seed rounds with long term runways, although this is becoming more common.
What are my next steps?
Understand the nuances of SAFE financing and consider alternatives to determine what is best for your company.
Note that SAFE Financings may not be the most appropriate investment instrument to raise capital from friends and family. Learn more about our Common Equity Financing.
Consider your future legal needs.
Add a Goodlawyer Pro membership to your SAFE, and get specialized legal expertise whenever you need it.
Basic SAFE – what is included?
Investment Readiness Assessment (see FAQ for details).
SAFE investment contract prepared for each participating investor
(up to 5 investors).
Risk acknowledgment forms, as required under applicable securities laws, for SAFE investment contracts issued to accredited investors and family, friend and business associate investors.
Closing capitalization records.
Suitable for founders who are leading an investment round with up to $500,000 in convertible equity investment.
A Complex service or Custom quote may be required when your SAFE Financing deviates from the scope outlined above, such as if the fundraising exceeds $500,000, has more than 5 Canadian Investors, has any Investors outside of Canada, includes any unique rights or terms, or requires additional lawyer support.