All terms
SAFE Note
An agreement to receive equity in future funding.
QUICK ANSWER
A SAFE Note is an investment agreement that gives investors the right to receive equity in a future funding round, usually at a discounted valuation.
In depth
SAFE stands for Simple Agreement for Future Equity. It is a popular instrument used by early-stage startups to raise capital without setting a valuation immediately. Instead of issuing shares upfront, the investor receives the right to convert their investment into equity during a future priced round. SAFEs often include terms like valuation caps and discounts. They are simpler and faster to execute than traditional convertible notes, making them widely used in pre-seed and seed funding.