SAFEs

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    • 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.

  1. This spreadsheet is very helpful. Thank you.

    What about friends & family rounds where you already know the price of the round, would you still recommend the SAFE?

    For example, if I’m looking to just bring in the first $100k at a $900 premoney valuation (10% equity), just to get things off the ground, does it still make sense to use the SAFE and put the cap at $900k?

    It just seems like such a simple instrument to use, rather than fiddling with a note or series seed documents.

    • The liquidity scenario assumes that the liquidity event occurs before the Series A, which is why the Series A are not accounted for in the spreadsheet.

  2. Hi John – Shouldn’t the pre-money SAFE outcomes be effected by other SAFEs issued? In the model I noticed that the SAFE 2 terms do not effect the SAFE 1 terms or vice versa.

    • 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.

  3. Helpful spreadsheet. Hope you’ll update to cover the newer YC Post Money SAFE, with the potoential to add in a subsequent convertible note on the way to a priced round. Our pre revenue (pre-seed) microLED company first took in angel capital under a SAFE (postmoney). Thereafter we had interest from a VC firm that requuired a convertible note and we accepted their terms and now have both instruments. I want to give the SAFE investors the option to switch to the note, but have no good vehicle to allow them to understant the merits of staying under the SAFE or moving to the note. If I could find a spreadsheet that covered this situation, I could build it out under a few scenarios for the SAFE investors.

  4. 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.