Simple Agreement For Future Equity Template In Nassau
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
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If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
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FAQ
A Simple Agreement for Future s is a contract between a blockchain developer and a buyer, who contributes a certain amount of capital for the promise of an equal amount of s when the project meets specific goals. An SAFT is similar to an SAFE, which is for equity.
The Discount Rate is calculated as 100% minus the percent discount the SAFE investors are entitled to. For example, if SAFE investors are entitled to a discount of 20% (they can buy Standard Preferred Stock 20% cheaper than subsequent investors), the Discount Rate is 80% = 100% - 20%.
They are accounted for as equity on the balance sheet. When the Simple Agreement for Future Equity converts to preferred stock, the accounting entries are that the SAFE entry is removed and the amount is credited to preferred equity (ignoring any APIC implications).
For example, if a SAFE has a valuation cap of $10 million, and your startup's next financing round values the company at $15 million, the SAFE investor's equity will be calculated based on the $10 million cap, not the $15 million valuation.
The Discount Rate is calculated as 100% minus the percent discount the SAFE investors are entitled to. For example, if SAFE investors are entitled to a discount of 20% (they can buy Standard Preferred Stock 20% cheaper than subsequent investors), the Discount Rate is 80% = 100% - 20%.
How to negotiate a SAFE agreement Understand the terms and conditions. Create a term sheet that outlines the conditions you're willing to accept and those you want to negotiate. Align interests with investors. Find investors who offer more than just capital. Come in with a plan. Focus on building relationships.
