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Lowering SAFE cap for larger tickets?

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May 30, 2024

What is your advice/reaction to a founder that wants to issue two levels of SAFE notes? Level 1: Minimum Investment: $10,000  Conversion Terms: Convertible to stock in the Series A round at a $20 million pre-money valuation cap.   Level 2: Minimu...

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This is not a good approach and will cause 409a valuation issues for the founder. It's also incredibly difficult for them to explain this to future investors. Every investor in this round should come in on the same terms. Then, after the...

2

What are the differences between using SAFE in the UK and the US?

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Dec 03, 2023

I believe they are often called ASAs (Advance Subscription Agreements) in the UK. Are there any fundamental differences in how they work in the UK and US?

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Generally speaking, an Advanced Subscription Agreement (commonly known as an ASA and designed for use in the United Kingdom), is conceptually similar to a SAFE (originally designed for use within the United States).  However, there are ...

1

Standard Y Combinator SAFE agreement - error?

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Aug 30, 2023

Regarding a typical Y Combinator SAFE agreement: In the event of an Equity Financing, who should be responsible for "execute and deliver all of the transactions documents related to the Equity Financing". The Investor or the Company? The current ...

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Question: With respect to financing documents, what does an early-stage VC need to do at the time of a an Equity Financing (aka Preferred Stock Financing), if said VC invested earlier in a typical SAFE note? A standard, unaltered Y Com...