Introducing the Simple Agreement for Future Equity (SAFE) for LLCs

Updated March 31, 2021:

There are now two versions of the model form Safe for LLCs:

  1. The new post-money Safe with valuation cap (short form), which may be viewed here and purchased here; and
  2. The original pre-money long-form Safe with optional discount and valuation cap, which may be viewed here and purchased here.

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My Simple Agreement for Future Equity (SAFE) for LLCs is the first SAFE specifically designed for limited liability companies classified under U.S. federal tax law as partnerships or disregarded entities.

THE SAFE FOR LLCS IS FOR EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL OR OTHER PROFESSIONAL ADVICE. NOTHING CONTAINED IN OR REFERENCED BY THE SAFE FOR LLCS CONSTITUTES RENDERING OF LEGAL OR PROFESSIONAL ADVICE FOR ANY SPECIFIC CASE OR SITUATION. NOTHING IN THE SAFE FOR LLCS IS A SUBSTITUTE FOR THE ADVICE OF AN ATTORNEY.  YOUR USE OF THIS SAFE IS AT YOUR OWN RISK. AND YOU MUST CONSULT WITH AN RELY UPON THE ADVICE OF YOUR OWN PROFESSIONAL LEGAL AND TAX ADVISORS WITH RESPECT TO THE ISSUANCE OF, AND INVESTMENT IN, THE SAFE FOR LLCS.  

10 responses

    • I suppose you could attach it as an exhibit, but it would be time consuming and probably awkward to include the full SAFE in the LLC agreement. The SAFE is designed to speed up financings and that process would likely slow things down and increase complexity.

    • It could be done, but then why not use a convertible note? The basic premise of the SAFE is that it is a convertible note without interest and without a maturity date.

  1. I’m confused – it says at the top that this page that this is the version with a cap and discount. Is that not the case?

    • There are two versions, (i) a long-form version that includes an optional cap and/or discount and (ii) a newer short form with a cap only. I have not yet created a short form version with a cap and/or discount, only with a cap.

    • This is designed for a Delaware LLC but could be adapted for use in other states in consultation with legal counsel.

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