SIMPLE AGREEMENT FOR FUTURE EQUITY (SAFE)

Post-Money Valuation Cap

[// GUIDANCE: This is a Post-Money SAFE based on Y Combinator's standard form. Post-money SAFEs account for approximately 85% of all SAFEs signed according to 2025 market data. The post-money valuation cap means the investor's ownership percentage is fixed at signing and does not change with subsequent SAFE issuances.]

THIS CERTIFIES THAT in exchange for the payment by [INVESTOR NAME] (the "Investor") of $[INVESTMENT AMOUNT] (the "Purchase Amount") on or about [DATE], [COMPANY NAME], a Delaware corporation (the "Company"), issues to the Investor the right to certain shares of the Company's Capital Stock, subject to the terms described below.

SAFE TERMS SUMMARY

[// GUIDANCE: Current market data (2025): Median valuation cap is approximately $10M for $1M raised. 61% of SAFEs use valuation cap only; 30% include both cap and discount; typical discount is 20%.]

ARTICLE 1 - EVENTS

1.1 Equity Financing

[// GUIDANCE: This is the primary conversion event. The "Equity Financing" threshold should be set high enough to indicate a meaningful priced round (typically $1,000,000 or more).]

(a) If there is an Equity Financing before the termination of this Safe, on the initial closing of such Equity Financing, this Safe will automatically convert into the number of shares of Safe Preferred Stock equal to the Purchase Amount divided by the Conversion Price.

(b) In connection with the automatic conversion of this Safe into shares of Safe Preferred Stock, the Investor will execute and deliver to the Company all of the transaction documents related to the Equity Financing.

(c) "Equity Financing" means a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells Preferred Stock at a fixed valuation, including but not limited to, a pre-money or post-money valuation.

(d) Minimum Threshold: The Equity Financing must result in aggregate gross proceeds to the Company of at least $[1,000,000] (excluding the conversion of SAFEs and convertible instruments).

1.2 Liquidity Event

(a) If there is a Liquidity Event before the termination of this Safe, the Investor will, at its option, either:

☐ (i) Receive Cash Payment: Receive a cash payment equal to the Purchase Amount; or

☐ (ii) Convert to Common Stock: Automatically receive from the Company a number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price.

(b) "Liquidity Event" means:
- (i) A Change of Control; or
- (ii) An Initial Public Offering (IPO).

(c) "Change of Control" means:
- (i) A transaction or series of related transactions in which any "person" or "group" (within the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the outstanding voting securities of the Company;
- (ii) A merger, consolidation, or similar transaction in which the Company is not the surviving corporation; or
- (iii) A sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company.

1.3 Dissolution Event

(a) If there is a Dissolution Event before the termination of this Safe:
- (i) The Company shall pay to the Investor an amount equal to the Purchase Amount, due and payable to the Investor immediately prior to, or concurrent with, the consummation of the Dissolution Event.
- (ii) The Purchase Amount will be paid prior and in preference to any distribution of any of the assets of the Company to holders of outstanding Capital Stock.

(b) "Dissolution Event" means:
- (i) A voluntary termination of operations;
- (ii) A general assignment for the benefit of the Company's creditors; or
- (iii) Any other liquidation, dissolution, or winding up of the Company (excluding a Liquidity Event).

ARTICLE 2 - DEFINITIONS

2.1 Defined Terms

"Capital Stock" means the capital stock of the Company, including, without limitation, the Common Stock and Preferred Stock.

"Common Stock" means the Company's common stock.

"Company Capitalization" means the sum, as of immediately prior to the Equity Financing, of:
- (a) All shares of Capital Stock (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all outstanding vested and unvested options, warrants, and other convertible securities, but excluding:
- (i) This Safe;
- (ii) All other Safes; and
- (iii) Convertible promissory notes;
- (b) All shares of Common Stock reserved and available for future grant under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection with the Equity Financing;
- (c) All shares of Capital Stock issuable upon conversion of this Safe and all other Safes; and
- (d) All shares of Capital Stock issuable upon conversion of any convertible promissory notes.

[// GUIDANCE: The Post-Money SAFE includes all SAFEs in the Company Capitalization calculation, which means each SAFE investor's ownership percentage is fixed at signing and does not dilute with subsequent SAFE issuances.]

"Conversion Price" means the lesser of:
- (a) The Safe Price; or
- (b) The Discount Price (if applicable).

"Discount Price" means the price per share of the Standard Preferred Stock sold in the Equity Financing multiplied by the Discount Rate of [80]% (representing a [20]% discount).

[// GUIDANCE: If no discount applies, delete the Discount Price definition and references.]

"Liquidity Capitalization" means the number, as of immediately prior to the Liquidity Event, of shares of Capital Stock (on an as-converted basis) outstanding, assuming exercise or conversion of all outstanding vested and unvested options, warrants, and other convertible securities, but excluding shares of Common Stock reserved and available for future grant under any equity incentive or similar plan.

"Liquidity Price" means the price per share equal to:
- (a) The Valuation Cap divided by the Liquidity Capitalization; or
- (b) If the Discount Rate applies, the fair market value of the Common Stock at the time of the Liquidity Event multiplied by the Discount Rate.

"Preferred Stock" means the Company's preferred stock.

"Safe" means this Simple Agreement for Future Equity.

"Safe Preferred Stock" means the shares of a series of Preferred Stock issued to the Investor in an Equity Financing, having the identical rights, privileges, preferences, and restrictions as the shares of Standard Preferred Stock, other than with respect to:
- (a) The per share liquidation preference, which will equal the Conversion Price; and
- (b) The basis for any dividend rights, which will be based on the Conversion Price.

"Safe Price" means the price per share equal to the Valuation Cap divided by the Company Capitalization.

"Standard Preferred Stock" means the shares of a series of Preferred Stock issued to new investors purchasing equity in the Equity Financing.

"Valuation Cap" means $[VALUATION CAP AMOUNT].

ARTICLE 3 - COMPANY REPRESENTATIONS

3.1 Organization and Good Standing

The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has the power and authority to own, lease, and operate its properties and carry on its business as now conducted.

3.2 Authorization

All corporate action has been taken on the part of the Company, its officers, directors, and stockholders necessary for the authorization, execution, and delivery of this Safe. The Company has taken all corporate action required to make all of the obligations of the Company reflected in the provisions of this Safe valid and enforceable obligations.

3.3 Compliance with Laws

To its knowledge, the Company is not in violation of any law, ordinance, or governmental rule or regulation to which it is subject, and the Company has not failed to obtain any license, permit, franchise, or other governmental authorization necessary to the ownership of its properties or to the conduct of its business.

3.4 Securities Law Compliance

Assuming the accuracy of the Investor's representations in Article 4, the offer, sale, and issuance of this Safe are exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), and state securities laws, pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder.

ARTICLE 4 - INVESTOR REPRESENTATIONS

4.1 Accredited Investor Status

The Investor represents that:

☐ The Investor is an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act; OR

☐ The Investor is not a U.S. person (as defined in Regulation S of the Securities Act) and is acquiring this Safe in an offshore transaction in compliance with Regulation S.

4.2 Investment Intent

The Investor is acquiring this Safe and the underlying securities for the Investor's own account for investment, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and the Investor has no present intention of selling, granting any participation in, or otherwise distributing the same.

4.3 Sophistication

The Investor has such knowledge and experience in financial or business matters that the Investor is capable of evaluating the merits and risks of the investment in this Safe and the underlying securities.

4.4 Risk Acknowledgment

The Investor understands that:
- (a) The Company has a limited operating history and may have no revenues or profits;
- (b) An investment in this Safe involves a high degree of risk;
- (c) There is no guarantee that the Investor will receive a return of the Purchase Amount or any return on investment; and
- (d) This Safe and the underlying securities are highly illiquid and there is no public market for them.

4.5 Access to Information

The Investor has had an opportunity to ask questions and receive answers from the Company regarding the Company and the terms and conditions of this Safe.

4.6 No General Solicitation

The Investor acknowledges that the Investor is not purchasing this Safe as a result of any general solicitation or general advertising.

ARTICLE 5 - MISCELLANEOUS

5.1 Pro Rata Rights

[// GUIDANCE: Pro rata rights allow investors to maintain their ownership percentage in future rounds. Include this section if agreed upon.]

☐ Pro Rata Rights Included:

(a) The Investor shall have a right to purchase its Pro Rata Share of Standard Preferred Stock sold in any Equity Financing.

(b) "Pro Rata Share" means the ratio of:
- (i) The number of shares of Capital Stock owned by the Investor immediately prior to the Equity Financing (on an as-converted basis); to
- (ii) The total number of shares of Capital Stock outstanding immediately prior to the Equity Financing (on an as-converted basis).

(c) The pro rata right shall terminate upon the earlier of:
- (i) Three (3) years following an IPO; or
- (ii) The closing of a Change of Control.

5.2 Most Favored Nation (MFN)

[// GUIDANCE: MFN provisions allow this SAFE holder to adopt more favorable terms given to subsequent SAFE investors.]

☐ MFN Provision Included:

If the Company issues any subsequent Safe or convertible security with terms more favorable to the holder thereof than the terms of this Safe, the Company shall promptly provide written notice to the Investor. The Investor shall have the right, upon written notice to the Company within thirty (30) days of such notice, to amend this Safe to include any or all of such more favorable terms.

5.3 Amendment

Any provision of this Safe may be amended, waived, or modified only upon the written consent of the Company and the Investor.

5.4 Assignment

Neither this Safe nor the rights contained herein may be assigned, by operation of law or otherwise, by either party without the prior written consent of the other; provided, however, that this Safe may be assigned without the Company's consent by the Investor to any affiliate of the Investor or to any other entity that directly or indirectly controls, is controlled by, or is under common control with, the Investor.

5.5 No Rights as Stockholder

This Safe does not entitle the Investor to any voting rights, dividends, or other rights as a stockholder of the Company prior to the conversion of this Safe.

5.6 Tax Treatment

For federal and state income tax purposes, this Safe is intended to be treated as stock.

5.7 Governing Law

This Safe shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision that would cause the application of the laws of any jurisdiction other than Delaware.

5.8 Dispute Resolution

Any dispute arising out of or relating to this Safe shall be resolved in the Court of Chancery of the State of Delaware (or, if the Court of Chancery declines to accept jurisdiction, any state or federal court within the State of Delaware). Each party irrevocably waives any objection to venue in such courts.

5.9 Entire Agreement

This Safe constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, and agreements relating thereto.

5.10 Notices

All notices required or permitted hereunder shall be in writing and shall be deemed effectively given upon:
- (a) Personal delivery to the party to be notified;
- (b) When sent by confirmed electronic mail or facsimile;
- (c) Five (5) days after deposit in the United States mail, postage prepaid, registered or certified mail; or
- (d) One (1) day after deposit with a nationally recognized overnight courier.

5.11 Counterparts

This Safe may be executed in counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument. Electronic signatures shall have the same legal effect as original signatures.

EXECUTION

IN WITNESS WHEREOF, the undersigned have caused this Safe to be duly executed and delivered.

COMPANY:

[COMPANY NAME]

By: _________________________________

Name: [AUTHORIZED SIGNATORY NAME]

Title: [TITLE]

Date: _________________________________

Address:
[COMPANY ADDRESS]
[CITY, STATE ZIP]

Email: [COMPANY EMAIL]

INVESTOR:

[INVESTOR NAME]

By: _________________________________

Name: [AUTHORIZED SIGNATORY NAME]

Title: [TITLE] (if applicable)

Date: _________________________________

Address:
[INVESTOR ADDRESS]
[CITY, STATE ZIP]

Email: [INVESTOR EMAIL]

SCHEDULE A - INVESTOR INFORMATION

Investor Legal Name: [FULL LEGAL NAME]

Type of Entity: ☐ Individual ☐ Corporation ☐ LLC ☐ Partnership ☐ Trust ☐ Other: ___________

Tax ID / SSN: [TAX ID NUMBER]

Purchase Amount: $[AMOUNT]

Wire Transfer Information (for future payments):
- Bank Name: [BANK NAME]
- ABA Routing Number: [ROUTING NUMBER]
- Account Number: [ACCOUNT NUMBER]
- Account Name: [ACCOUNT NAME]

SCHEDULE B - DISCLOSURE SCHEDULE

[// GUIDANCE: Use this schedule to disclose any exceptions to Company representations.]

Exceptions to Section 3.3 (Compliance with Laws):
- [LIST ANY EXCEPTIONS OR STATE "NONE"]

Other Material Disclosures:
- [LIST ANY OTHER MATERIAL INFORMATION]

This Simple Agreement for Future Equity is based on the Y Combinator Post-Money SAFE form, the industry standard for early-stage startup financing. This document should be reviewed by qualified legal counsel familiar with securities laws and venture capital transactions. The offer and sale of this Safe is intended to be exempt from registration under the Securities Act of 1933 pursuant to Section 4(a)(2) and/or Regulation D.