Simple Agreement For Future Equity Deutsch

In the Zegal app, you have four ways to convert the SAFE into preferred shares during an equity financing: equity financing is defined in the SAFE as a „bona fide transaction or a series of operations with the primary purpose of raising capital, according to which the company issues and sells preferred shares for a fixed pre-money valuation“. Unlike a convertible bond, there is no threshold or minimum amount for equity financing. When SAFE was initially implemented by YCombinator, the goal was to simplify the process of investing in a start-up at the beginning, through seed financing, in front of the company that carries out Series A risk financing. While safes are used for these seed towers, these cycles are really better regarded as totally separate financing rather than „bridges“ in subsequent price cycles. The absence of these additional safeguards is part of what makes SAFE simpler, but it also means that the potential risk for investors is greater. However, to be fair to SAFE, being business-friendly is more of a feature than a bug. Under a Simple Agreement for Future Equity (SAFE), the investment is converted into equity in the event of an „equity financing“, a „liquidity event“ or a „dissolution event“. . . .

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