SAFE (Simple Agreement for Future Equity)

A SAFE (Simple Agreement for Future Equity) is an agreement between an investor and a company that provides warrants to the investor for equity in the company without determining a specific price per share. The SAFE investor receives the futures shares when a priced round of investment or liquidation event occurs. Startup accelerator Y Combinator released the Simple Agreement for Future Equity (“SAFE”) investment instrument as an alternative to convertible debt in late 2013.