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A Simple Agreement for Future Tokens (SAFT) lets blockchain companies raise funds by promising investors future cryptocurrency tokens once their network launches. It works like a legal IOU - investors provide capital now, and the company commits to delivering tokens later when the platform is up and running.

SAFTs help crypto startups comply with U.S. securities laws by treating the initial investment as a security while keeping the future tokens separate. The SEC closely watches these agreements, so companies typically limit them to accredited investors and follow strict disclosure requirements. Think of it as a specialized investment contract designed specifically for blockchain projects still in development.

Use a Simple Agreement for Future Tokens when your blockchain startup needs to raise capital before launching a functional network. This agreement works best during early development stages when you have a clear technical roadmap but haven't created actual tokens yet. It gives you immediate funding while protecting both your company and investors under U.S. securities laws.

SAFTs make sense if you're targeting accredited investors and plan to develop a truly decentralized network. They help navigate the complex regulatory landscape between traditional securities and utility tokens. Just remember - if your tokens will function purely as securities or if your platform is already operational, different funding structures might work better.

• Basic SAFT: The standard version focuses on token delivery timing, price, and vesting schedules. Perfect for straightforward token sales to accredited investors.
• Convertible SAFT: Includes options to convert the investment into equity if the token launch doesn't happen, offering extra investor protection.
• Staged SAFT: Releases investment funds in phases based on development milestones, reducing risk for investors.
• Network-Launch SAFT: Ties token delivery specifically to technical milestones like mainnet launch or specific feature deployment.
• Hybrid SAFT: Combines token rights with traditional equity features, popular among institutional investors seeking multiple upside scenarios.

• Blockchain Startups: Companies developing new cryptocurrency networks use SAFTs to secure early-stage funding while staying compliant with securities laws.
• Accredited Investors: High-net-worth individuals or institutions who provide capital in exchange for future token rights.
• Securities Lawyers: Draft and review SAFT agreements to ensure compliance with SEC regulations and protect both parties' interests.
• Compliance Officers: Monitor ongoing adherence to SAFT terms and maintain required documentation for regulatory reporting.
• Technical Teams: Responsible for meeting development milestones that trigger token distribution under the SAFT terms.

• Token Details: Define your token's technical specifications, distribution mechanism, and timeline for network launch.
• Investment Terms: Determine token price, minimum investment amounts, and vesting schedules for different investor tiers.
• Investor Verification: Gather documentation proving accredited investor status to comply with SEC requirements.
• Project Milestones: Map out specific development goals that will trigger token distribution.
• Risk Disclosures: Document all potential risks, from technical failures to regulatory changes.
• Compliance Framework: Outline how your SAFT aligns with securities laws and AML requirements.

• Investment Details: Purchase amount, token price, and delivery conditions upon network launch.
• Token Rights: Clear description of investor rights, restrictions, and any lock-up periods.
• Representations: Statements confirming accredited investor status and compliance with securities laws.
• Distribution Terms: Specific conditions and timeline for token delivery after network launch.
• Risk Factors: Comprehensive disclosure of technical, regulatory, and business risks.
• Termination Clauses: Conditions for agreement cancellation and refund procedures.
• Governing Law: Jurisdiction and applicable legal framework for dispute resolution.

The Simple Agreement for Future Equity (SAFE) and Simple Agreement for Future Tokens (SAFT) share similar structures but serve different investment purposes. While both are investment instruments for early-stage funding, they offer distinct types of future value to investors.

• Investment Return: SAFTs promise specific cryptocurrency tokens upon network launch, while SAFEs convert to equity shares during future funding rounds.
• Regulatory Framework: SAFTs operate under cryptocurrency-specific SEC guidance, while SAFEs follow traditional securities regulations.
• Target Companies: SAFTs are exclusively for blockchain projects developing tokens, while SAFEs work for any startup seeking equity financing.
• Conversion Triggers: SAFTs convert upon network launch and token creation, while SAFEs typically convert during equity financing rounds or acquisition events.