What is an example of a SAFE note?

SAFE Note Example For example, an investor purchases a SAFE note from your startup with a valuation cap of $10M. Your company's value is set at $20M at $10/share during the subsequent funding round. The SAFE note will convert based on the valuation cap of $10M.

Simple Agreement For Future Equity Example Format In New York

Category:

Real Estate - Contracts - Equity

State:

Multi-State

Control #:

US-00036DR

Format:

Instant download

Description

The Simple Agreement for Future Equity serves as a vital document in New York for individuals entering into an equity-sharing arrangement, particularly for real estate investments. This form outlines essential aspects such as the property address, investor identities, purchase price, down payment amounts, and financial responsibilities, facilitating a clear understanding between parties. Users must accurately fill out details including investor names, property specifics, and financial contributions, ensuring all agreements are clear and enforceable. This form is particularly useful for attorneys, partners, owners, associates, paralegals, and legal assistants who assist clients in real estate ventures, providing a structured approach to ownership and profit-sharing. Key features include the stipulation of ownership percentages, responsibilities for mortgage, taxes, and utilities, as well as the protocol for distribution of proceeds upon sale. Additionally, provisions for conflict resolution, survivorship, and contractual modifications ensure comprehensive coverage for all involved parties. By utilizing this document, users can effectively establish legally binding agreements that protect their investments and articulate their rights in an equity venture.

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FAQ

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%.

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.

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).

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.

SAFE Note Example For example, an investor purchases a SAFE note from your startup with a valuation cap of $10M. Your company's value is set at $20M at $10/share during the subsequent funding round. The SAFE note will convert based on the valuation cap of $10M.