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A Simple Agreement for Future Equity (SAFE) gives early-stage investors the right to receive equity in a startup at a later date, typically during the next funding round. It's a popular alternative to convertible notes in Singapore's startup ecosystem, offering a simpler way to structure seed investments without debt components or maturity dates.

Under Singapore law, SAFEs help founders avoid immediate share dilution while giving investors potential upside through future equity conversion. The agreement automatically converts to shares when specific trigger events occur, such as a priced funding round or company sale. This makes it particularly attractive for local tech startups and angel investors who want to minimize legal complexity and negotiation time.

A Simple Agreement for Future Equity works best when your startup needs quick access to capital without the complexity of pricing shares or negotiating detailed investment terms. It's particularly valuable for Singapore-based companies raising pre-seed or seed funding from angel investors who understand the local startup ecosystem.

This funding tool makes sense during early development stages when your company's valuation remains uncertain. It helps you avoid the immediate share dilution that comes with equity rounds, while giving investors a clear path to ownership. Many Singapore tech startups use SAFEs when raising between S$50,000 and S$500,000, especially if they need to close multiple small investments quickly.

• Valuation Cap SAFE: Sets a maximum company valuation for converting investment to equity, popular among Singapore tech startups
• Discount SAFE: Offers investors shares at a discount to the next funding round's price, typically 10-30% lower
• MFN (Most Favored Nation) SAFE: Automatically gives investors the best terms offered to any later SAFE holders
• Hybrid SAFE: Combines both a valuation cap and discount rate, giving investors the more favorable conversion option
• Pro-rata SAFE: Includes rights for investors to participate in future funding rounds to maintain their ownership percentage

• Startup Founders: Issue SAFEs to raise early-stage capital while maintaining control and avoiding immediate equity dilution
• Angel Investors: Provide seed funding through SAFEs to get future equity rights without complex shareholder agreements
• Corporate Lawyers: Draft and review SAFE agreements to ensure compliance with Singapore's investment regulations
• Venture Capital Firms: Sometimes use SAFEs for quick deployment of small investments in promising startups
• Company Secretaries: Maintain records of SAFE holders and manage conversion events when triggered

• Company Details: Gather your ACRA registration, shareholding structure, and authorized share capital information
• Investment Terms: Decide on valuation cap, discount rate, or both for the SAFE conversion
• Investor Information: Collect full legal names, addresses, and investment amounts from all participating investors
• Trigger Events: Define specific conditions that will convert the SAFE into equity shares
• Board Approval: Document board resolution authorizing SAFE issuance under Singapore's Companies Act
• Documentation: Use our platform to generate a legally compliant SAFE agreement that includes all required elements

• Investment Amount: Clear statement of funds provided and corresponding future equity rights
• Conversion Terms: Detailed mechanics for converting investment into shares, including valuation cap or discount
• Trigger Events: Specific conditions that activate conversion, like equity financing or company sale
• Pre-Money Valuation: Formula for calculating company value before new investment
• Investor Rights: Pro-rata rights, information rights, and any special privileges
• Governing Law: Explicit statement of Singapore jurisdiction and applicable regulations
• Termination Provisions: Conditions for agreement expiry or early termination

A Simple Agreement for Future Equity (SAFE) differs significantly from an Equity Agreement in several key aspects under Singapore law. While both documents deal with company ownership, their timing, structure, and implications vary substantially.

• Investment Timing: SAFEs defer equity conversion until a future event, while Equity Agreements create immediate shareholding rights
• Valuation Requirements: SAFEs can be issued without setting a current company valuation, whereas Equity Agreements need a defined share price
• Shareholder Rights: SAFE holders typically have no voting or dividend rights until conversion, but Equity Agreement holders get immediate shareholder privileges
• Documentation Complexity: SAFEs are usually shorter and simpler, making them faster to execute than comprehensive Equity Agreements
• Regulatory Requirements: SAFEs face lighter regulatory scrutiny in Singapore, while Equity Agreements must comply with full ACRA shareholding requirements