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Simple Agreement For Equity
"I need a Simple Agreement for Equity (SAFE) for my Manila-based technology startup to accept a 鈧5 million investment from a local angel investor, with a 鈧50 million valuation cap and standard conversion terms."
1. Parties: Identifies the company and the investor(s) entering into the SAFE agreement
2. Background: Explains the context of the agreement - that the investor wishes to invest in the company through a SAFE instrument
3. Definitions: Defines key terms used throughout the agreement, including 'Equity Financing', 'Liquidity Event', 'Dissolution Event', and 'Conversion Price'
4. Investment Amount: Specifies the investment amount and when/how it will be paid
5. Events and Conversion: Details the various triggering events (equity financing, liquidity event, dissolution) and how the SAFE converts in each scenario
6. Conversion Mechanics: Specifies the technical process of how conversion will occur, including calculation methods and timing
7. Company Representations: Standard representations about the company's authority to enter into the agreement and its valid formation
8. Investor Representations: Investor's confirmations regarding investment sophistication and understanding of risks
9. General Provisions: Standard clauses including notices, amendments, governing law, and assignment restrictions
1. Most Favored Nation: Optional provision ensuring the investor gets the benefit of more favorable terms granted to future SAFE holders
2. Pro-rata Rights: Gives the investor the right to participate in future funding rounds, typically added for strategic investors
3. Information Rights: Grants investors rights to receive certain company information, usually included for larger investments
4. Board Seat Rights: Provides for observer or voting rights on the board, typically for significant investments
5. Transfer Restrictions: Additional restrictions on the transfer of SAFE rights, used when company wants more control over potential future shareholders
6. Dispute Resolution: Detailed arbitration or mediation procedures, added when parties want to specify alternative dispute resolution methods
1. Schedule A - Investment Details: Details of the investment amount, valuation cap, and/or discount rate
2. Schedule B - Conversion Calculations: Detailed examples and formulas for calculating conversion in different scenarios
3. Schedule C - Capitalization Table: Current capitalization of the company and pro forma calculations
4. Appendix 1 - Form of Notice: Template for notices regarding triggering events or conversion
5. Appendix 2 - Subscription Form: Form to be completed upon conversion to equity
Authors
Technology
Financial Services
E-commerce
Healthcare
Education Technology
Agriculture Technology
Clean Energy
Manufacturing
Software Development
Biotechnology
Digital Services
Consumer Products
Legal
Finance
Corporate Development
Executive Leadership
Investment
Compliance
Corporate Secretariat
Business Development
Risk Management
Chief Executive Officer
Chief Financial Officer
Corporate Lawyer
Investment Manager
Startup Founder
Legal Counsel
Corporate Secretary
Venture Capital Associate
Investment Director
Business Development Manager
Finance Director
Compliance Officer
Company Director
Angel Investor
Private Equity Manager
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