Simple Agreement For Future Equity Discount Rate

Sure, this is a potentially dangerous way to deal with any legal document, but there`s something about SAFE that makes founders feel safe. A SAFE grants the right to obtain a certain number of shares of Series A financing. Because SAFE investors invest earlier and take more risk than Series A investors, safe investors pay for their shares at a lower price than Series A investors. The valuation cap and discount rate control the extent of the SAFE investor discount. 4(a) The investor is fully operational, entitled and entitled to perform and provide this instrument and to fulfil its obligations under this Contract. This instrument constitutes a valid and binding commitment of the investor, enforceable on its terms, unless this is limited or undermined by bankruptcy, insolvency or other laws of general application with respect to the application of creditors` rights in general and the general principles of equity. A company is an accredited investor when all equity owners are accredited investors. There are other types of accredited investors, but these are the big ones. For a growing startup, the company is likely to raise more money. As a start-up investor, I`m not interested in just paying it back. The risk associated with a startup is high, so I hope that a high risk comes with a high upside potential. .