SAFE Note Template, Free Download 2026

This Simple Agreement for Future Equity (this "SAFE") is entered into as of [____________] by and between [____________], a [____________] corporation (the "Company"), and [____________] (the "Investor"). The Investor agrees to pay to the Company [$__________] (the "Purchase Amount") on or before [____________], and the Company agrees to issue equity securities to the Investor in accordance with the terms hereof. This SAFE is intended to be substantially similar to the forms developed by Y Combinator and adopted as standard early-stage financing instruments, and shall be interpreted accordingly. The Company shall promptly provide the Investor with a receipt acknowledging the receipt of the Purchase Amount. This SAFE is not a debt instrument; it does not accrue interest, does not have a maturity date, and shall not give rise to any right to repayment of the Purchase Amount except as expressly provided in Section 1.3 (Liquidity Event and Dissolution Event).

"Equity Financing" means a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells Preferred Stock at a fixed pre-money valuation. Upon an Equity Financing before the expiration or termination of this SAFE, the Company shall automatically issue to the Investor a number of shares of Safe Preferred Stock equal to the Purchase Amount divided by the Conversion Price. "Conversion Price" means [the lower of the Safe Price and the Discount Price (valuation cap and discount) / the Safe Price (valuation cap only) / the Discount Price (discount only)]. Where both a Valuation Cap and a Discount Rate apply, the Conversion Price is the lower of the two prices, with the effect that the Investor receives the greater number of shares: if the pre-money valuation of the Equity Financing exceeds the Valuation Cap, the Safe Price will be the lower price and will govern; if the pre-money valuation is equal to or less than the Valuation Cap, the Discount Price will be the lower price and will govern. In no event shall the Conversion Price exceed the price per share paid by the investors purchasing Standard Preferred Stock in the Equity Financing. "Safe Preferred Stock" means a series of Preferred Stock issued to the Investor upon conversion of this SAFE having the identical rights, privileges, preferences, and restrictions as the Standard Preferred Stock sold in the Equity Financing, except that the liquidation preference shall be equal to the Conversion Price, as adjusted for any stock dividends, splits, or recapitalizations.

"Liquidity Event" means a Change of Control or an Initial Public Offering. "Change of Control" means: (a) a transaction or series of related transactions in which any person or group of affiliated persons becomes the beneficial owner, directly or indirectly, of more than fifty percent (50%) of the outstanding voting securities of the Company, other than a transaction whose principal purpose is raising capital; (b) any reorganization, merger, or consolidation of the Company, other than one in which the holders of the Company's voting securities immediately before the transaction continue to hold more than fifty percent (50%) of the voting power of the surviving or acquiring entity immediately after the transaction; or (c) a sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company. "Initial Public Offering" means the closing of the Company's first firm-commitment underwritten public offering of Common Stock registered under the Securities Act, or the Company's first listing of Common Stock on a national securities exchange by means of a direct listing or comparable transaction. Upon a Liquidity Event before the expiration or termination of this SAFE, at the election of the Investor, the Company shall pay the Investor an amount equal to the greater of: (a) the Purchase Amount; or (b) the amount payable on the number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price. "Dissolution Event" means a voluntary termination of operations, a general assignment for the benefit of creditors, or any other liquidation, dissolution, or winding-up of the Company, whether voluntary or involuntary. Upon a Dissolution Event, the Investor shall be entitled to receive a cash payment equal to the Purchase Amount, on a pari passu basis with all other SAFEs and convertible instruments, before any amounts are distributed to holders of Common Stock, to the extent available assets of the Company permit.

"Standard Preferred Stock" means the shares of the series of Preferred Stock issued to the investors purchasing Preferred Stock for cash in the Equity Financing, having the rights, privileges, preferences, and restrictions, and sold at the price per share, established in that Equity Financing. "Valuation Cap" means [$__________ / Not applicable, the Conversion Price elected in Section 1.2 being the Discount Price (discount only)]. "Discount Rate" means [____________%, representing a ____________% discount / Not applicable, the Conversion Price elected in Section 1.2 being the Safe Price (valuation cap only)]. "Discount Price" means the price per share of the Standard Preferred Stock sold in the Equity Financing multiplied by the Discount Rate. "Safe Price" means the price per share equal to the Valuation Cap divided by the Company Capitalization immediately prior to the Equity Financing. "Company Capitalization" means, for the purpose of determining the Safe Price, the sum of: (a) the number of shares of Capital Stock (on an as-converted and as-exercised basis) issued and outstanding immediately prior to the Equity Financing; plus (b) the aggregate number of shares of Capital Stock issuable or reserved for issuance pursuant to stock options, warrants, convertible securities, or other rights to acquire Capital Stock then outstanding; plus (c) the aggregate number of shares of Capital Stock reserved for issuance under any equity compensation plan. The Safe Price shall be calculated immediately before giving effect to the Equity Financing. "Liquidity Price" means [the price per share equal to the Valuation Cap divided by the Liquidity Capitalization, where a Valuation Cap applies / the price per share equal to the fair market value of the Common Stock at the time of the Liquidity Event, as determined by reference to the aggregate consideration payable to the holders of Capital Stock in the Liquidity Event, multiplied by the Discount Rate, where the Conversion Price elected in Section 1.2 is the Discount Price (discount only)]. "Liquidity Capitalization" means the number of shares of Capital Stock outstanding immediately prior to the Liquidity Event, calculated on an as-converted and as-exercised basis and including shares issuable upon exercise of all outstanding options and warrants, but excluding: (a) shares reserved and not yet issued under any equity compensation plan; (b) shares of Capital Stock issuable upon the conversion of this SAFE; and (c) shares of Capital Stock issuable upon the conversion of any other SAFEs or convertible promissory notes.

The Investor shall have pro rata rights, as a holder of Safe Preferred Stock or as a SAFE holder prior to conversion, to participate in any future equity financing of the Company (other than the initial Equity Financing in which this SAFE converts) in accordance with the pro rata rights provisions of the Company's then-current investor rights agreement or equivalent document. "Pro Rata Rights" mean the right to purchase up to the Investor's pro rata share (based on the Investor's percentage ownership in the Company on a fully diluted basis immediately prior to such financing) of the securities offered in such financing on the same terms and conditions as offered to other investors. The Company shall provide the Investor with at least fifteen (15) business days' advance written notice of any financing triggering the Investor's pro rata rights, together with a term sheet or description of the material terms of such financing.

The Company represents and warrants to the Investor that: (a) the Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of [____________]; (b) the execution, delivery, and performance of this SAFE are within the Company's corporate powers and have been duly authorized by all necessary corporate action, including approval by the Board of Directors; (c) this SAFE constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, and similar laws of general application affecting creditors' rights and to general principles of equity; (d) no governmental consents or filings are required in connection with the performance of this SAFE, other than any notices required under applicable securities laws; and (e) the issuance of this SAFE and the shares issuable upon conversion hereof will not violate the Company's certificate of incorporation, bylaws, or any material agreement to which the Company is a party.

The Investor represents and warrants to the Company that: (a) the Investor has full legal capacity, power, and authority to execute, deliver, and perform this SAFE; (b) this SAFE constitutes the valid and binding obligation of the Investor, enforceable against the Investor in accordance with its terms; (c) the Investor is an "accredited investor" as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act"), and has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of this investment; (d) the Investor is acquiring this SAFE and the securities issuable hereunder for the Investor's own account, for investment purposes only, and not with a view to any distribution, assignment, resale, or other disposition in violation of the Securities Act; (e) the Investor understands that the securities issuable hereunder have not been registered under the Securities Act and may not be transferred without registration or an exemption therefrom; and (f) the Investor has reviewed the Company's capitalization table and financial statements and has had the opportunity to ask questions of the Company and receive answers regarding the terms and conditions of this investment.

This SAFE shall terminate (without relieving the Company of any obligations arising from a prior breach of this SAFE) upon the earlier of: (a) the issuance of Capital Stock to the Investor pursuant to Section 1.2 upon an Equity Financing; (b) the payment of amounts due to the Investor pursuant to Section 1.3 upon a Liquidity Event or Dissolution Event; or (c) by mutual written consent of the Company and the Investor. This SAFE has no maturity date and does not expire by passage of time: it remains outstanding until one of the events described in clauses (a) through (c) occurs, and the Investor has no right to demand repayment of the Purchase Amount except as expressly provided in Section 1.3. The Company shall provide the Investor with written notice of any anticipated Equity Financing, Liquidity Event, or Dissolution Event no later than ten (10) business days prior to the expected closing thereof. This SAFE is subject to the most-favored-nation ("MFN") provision: if the Company issues any SAFEs to subsequent investors on terms more favorable than those herein, the Company shall promptly notify the Investor and the Investor shall have the right to amend this SAFE to include such more favorable terms.

The Investor shall have the right to receive the Company's annual financial statements (including a balance sheet, income statement, and statement of cash flows, prepared in accordance with GAAP or on a consistent basis) and other material financial information promptly upon written request, until conversion of this SAFE. The Company shall promptly notify the Investor in writing of any material adverse change in the Company's business, financial condition, or prospects, including any change of control transaction, material litigation, or regulatory action. This SAFE shall be governed by and construed in accordance with the laws of the State of [____________], without regard to principles of conflict of laws. Any dispute arising under this SAFE shall be resolved by binding arbitration in [____________] under the Commercial Arbitration Rules of the American Arbitration Association, and judgment on the award rendered may be entered in any court of competent jurisdiction. This SAFE constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings. This SAFE may not be amended or waived without the written consent of both parties. This SAFE may be executed in counterparts, and signatures delivered by electronic transmission shall be deemed original.