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CL

Carolynn Levy

09/20/19

@ Y Combinator

If an investor wants to add terms to a SAFE to address concerns about conversion, you can negotiate that, but it adds complexity to the agreement.

Video

YC

Carolynn Levy - Modern Startup Funding

@ Y Combinator

09/20/19

Related Takeaways

CL

Carolynn Levy

09/20/19

@ Y Combinator

The only key term to negotiate in a SAFE is the valuation, which affects how it converts and the dilution involved.

CL

Carolynn Levy

03/07/18

@ Y Combinator

The only two negotiable terms in the SAFE are the investment amount and the valuation cap.

YC

Y Combinator Cast

03/07/18

@ Y Combinator

Investors should ensure their rights under a SAFE are respected during conversion rounds, particularly regarding pro-rata rights, as ignoring these rights breaches the contract.

KN

Kirsty Nathoo

10/17/18

@ Y Combinator

Negotiating a SAFE typically involves only two points: the amount of money the investor will contribute and the valuation cap.

YC

Y Combinator Cast

03/07/18

@ Y Combinator

Investors should model their SAFE conversions to understand the implications of multiple SAFEs with different valuations and discounts, as this can complicate ownership stakes.

CL

Carolynn Levy

03/07/18

@ Y Combinator

The MFN SAFE, or Most Favored Nation SAFE, allows investors to amend their terms if subsequent investors negotiate better terms.

YC

Y Combinator Cast

03/07/18

@ Y Combinator

Founders often lack understanding of the complexities of SAFE conversions and dilution, which can lead to confusion during fundraising.

YC

Y Combinator Cast

03/07/18

@ Y Combinator

The SAFE (Simple Agreement for Future Equity) allows investors to convert their investment into equity at a later date, but the exact ownership percentage isn't known until the priced round occurs.

YC

Y Combinator Cast

03/07/18

@ Y Combinator

Investors should review the cap table and conversion calculations carefully when their SAFEs convert, as errors can occur and affect their ownership stake.