SAFE

Definition

Simple Agreement for Future Equity—a Y Combinator innovation that lets startups take money now and figure out the valuation later. 'Simple' is debatable; some lawyers call them 'complex convertible debt without the debt.'

Example Usage

We raised $500K on a SAFE with a $10M valuation cap, figuring we'd let the Series A investors set the real price.

Origin

Created by Y Combinator in 2013 as a founder-friendly alternative to convertible notes

Fun Fact

SAFEs were so controversial when released that some prominent VCs refused to use them, calling them too founder-friendly and potentially problematic for future rounds.

Source: Y Combinator legal documentation and startup financing standards

Related Terms

Intermediate

investment memo

An internal document where VCs justify their investment thesis to partners, typically written with supreme confidence that will be mocked at the next downturn. The receipts for future 'I told you so' moments.

🚀 Startup / VC

Intermediate

cockroach startup

A resilient company that survives on minimal resources and refuses to die despite market conditions that would kill competitors. They're scrappy, resourceful, and nearly impossible to eliminate.

🚀 Startup / VC

Intermediate

fully diluted

A calculation of ownership percentages that includes all possible shares—options, warrants, convertible notes, and that napkin the founder signed in 2009. The number that reveals how little of the company you actually own.

🚀 Startup / VC

Intermediate

pivot or die

The startup mantra that romanticizes abandoning your original business plan when it becomes clear nobody wants what you're building. It's plan B through Z, pitched as strategic thinking rather than desperate flailing.

🚀 Startup / VC

Advanced

note tsunami

The overwhelming wave of convertible notes and SAFEs that convert to equity during a priced round, often revealing a far more complex cap table than founders realized. The moment when chickens come home to roost, except the chickens are financial instruments.

🚀 Startup / VC

Intermediate

ARR

Annual Recurring Revenue -- the amount of subscription money a company expects to collect over a year, assuming nobody cancels, which they will. It's the startup metric most likely to appear in fundraising decks and least likely to match reality.

🚀 Startup / VC

Translate This Term

See “SAFE” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

Try the Translator

Share This Term

Post on X Share on Facebook Share on LinkedIn

Discover a Term

Beginner

TBE

A piece of writing that is TBE (to be edited) needs to be revised before publication. For example, a draft of a magazine...