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A Simple Agreement for Future Equity (SAFE) lets startups raise quick funding without immediately setting a company valuation or issuing shares. It's a popular alternative to convertible notes in Australia's startup ecosystem, offering investors the right to future equity when specific events occur, like a priced funding round.

Under Australian corporate law, SAFEs give investors a straightforward path to ownership while helping founders maintain control during early stages. The agreement typically converts to shares at a discount to the next qualifying round's price, protecting both parties from complex valuation discussions when the company's worth is still uncertain.

A Simple Agreement for Future Equity makes perfect sense when your startup needs quick capital but isn't ready for a formal valuation. It's particularly useful in Australia's early-stage ecosystem where founders need flexibility and investors want simplified paperwork. The startup gets funding without immediate dilution, while investors secure future equity rights.

This tool works brilliantly during seed rounds, bridge financing, or when you need to close deals quickly. Many Australian accelerators and angel investors prefer SAFEs because they're faster and cheaper than convertible notes, with fewer compliance requirements. Just ensure your company structure can accommodate future conversion terms.

• Safe Equity Agreement: The standard Australian SAFE includes valuation caps, discount rates, and most favored nation clauses. Valuation caps set the maximum price for converting investment to equity, while discount rates offer a percentage off the next round's price. Most favored nation provisions ensure investors get the best terms offered to later SAFE holders.

• Startup Founders: Create and issue SAFEs to raise capital without immediate equity dilution. They maintain control while securing funding for growth and development.
• Angel Investors: Provide early-stage funding through SAFEs, gaining future equity rights at potentially favorable terms.
• Corporate Lawyers: Draft and review SAFE agreements to ensure compliance with Australian securities laws and protect both parties' interests.
• Accelerators: Often use standardized SAFEs when investing in portfolio companies, streamlining their investment process.
• Company Directors: Must approve SAFE issuance and ensure proper corporate governance around future equity commitments.

• Company Details: Gather your ACN, company structure, and current capitalization table.
• Investment Terms: Decide on valuation cap, discount rate, and conversion triggers.
• Investor Information: Collect full legal names, addresses, and investment amounts from all participating parties.
• Corporate Approvals: Ensure board resolution authorizing SAFE issuance is in place.
• Template Selection: Our platform generates customized SAFEs that comply with Australian securities laws, incorporating all required elements automatically.
• Future Planning: Document your expected timeline for next equity round or exit event.

• Investment Amount: Clearly state the purchase amount and payment terms.
• Conversion Rights: Define equity conversion triggers, including qualifying financing rounds and exit events.
• Valuation Terms: Specify valuation cap and/or discount rate for future equity conversion.
• Pro-rata Rights: Detail investor participation rights in future funding rounds.
• Termination Provisions: Include dissolution and winding-up procedures.
• Governing Law: Specify Australian jurisdiction and applicable securities laws.
• Execution Block: Include proper signing sections for all parties, with ACN details for companies.

Simple Agreements for Future Equity (SAFEs) are often compared to Equity Agreements, but they serve distinctly different purposes in Australian startup funding. While both involve company ownership, their structures and timing vary significantly.

• Immediate vs Future Rights: SAFEs only convert to equity in the future when specific events occur, while Equity Agreements create immediate shareholding rights and obligations.
• Valuation Requirements: SAFEs don't need a current company valuation, making them ideal for early-stage startups. Equity Agreements require agreed-upon valuations upfront.
• Complexity Level: SAFEs use simpler documentation and fewer corporate approvals, whereas Equity Agreements involve detailed shareholder rights, voting powers, and ASIC notifications.
• Flexibility: SAFEs offer more adaptable terms for future funding rounds, while Equity Agreements lock in specific ownership structures that can be harder to modify.