SAFE (Simple Agreement for Future Equity)

SAFE (Simple Agreement for Future Equity)

Overview

A SAFE (Simple Agreement for Future Equity) is a financing instrument developed by Y Combinator in 2013 that allows startups to raise capital from investors without immediately issuing equity or establishing a company valuation. The SAFE converts into equity upon the occurrence of specified triggering events, most commonly a priced equity financing round.

SAFE Instrument Types

Note: As of 2024, approximately 87% of SAFEs issued are Post-Money SAFEs, which are now the industry standard.

SAFE Agreement

THIS SAFE (Simple Agreement for Future Equity) (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

COMPANY:
Name: [________________________________]
State of Incorporation: [________________________________]
Type of Entity: ☐ Corporation ☐ Limited Liability Company
Principal Address: [________________________________]
[________________________________]

INVESTOR:
Name: [________________________________]
Type: ☐ Individual ☐ Entity (specify type: [____________________])
Address: [________________________________]
[________________________________]

Article 1: Investment Terms

1.1 Purchase Amount

The Investor agrees to pay to the Company the total amount of $[________________________________] (the "Purchase Amount") in exchange for this SAFE on the Effective Date.

1.2 SAFE Type

This SAFE is issued as (select one):

☐ Post-Money SAFE with Valuation Cap Only
Valuation Cap: $[________________________________]

☐ Post-Money SAFE with Valuation Cap and Discount
Valuation Cap: $[________________________________]
Discount Rate: [____]% (typically 10-25%)

☐ Post-Money SAFE with Discount Only
Discount Rate: [____]%

☐ MFN (Most Favored Nation) SAFE
(No valuation cap; subject to MFN provisions in Article 5)

1.3 Definitions

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

(b) "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 Securities Exchange Act of 1934), 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 entity; or (iii) the sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company.

(c) "Company Capitalization" means, immediately before the Equity Financing and without double counting on an as-converted-to-Common-Stock basis: (i) all issued and outstanding Capital Stock; (ii) this SAFE and all other converting SAFEs, notes, and convertible securities; (iii) all outstanding vested and unvested options, warrants, restricted awards, and promised but ungranted awards treated as outstanding in the financing; and (iv) the unissued option pool, except that a financing-related increase is included only to the extent promised awards exceed the pre-increase pool.

(e) "Discount Price" means the price per share of the Standard Preferred Stock sold in the Equity Financing multiplied by the Discount Rate.

(f) "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), whether voluntary or involuntary.

(g) "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.

(h) "Initial Public Offering" means the closing of the Company's first firm commitment underwritten initial public offering of Common Stock pursuant to a registration statement filed under the Securities Act.

(i) "Liquidity Event" means a Change of Control or an Initial Public Offering.

(j) "Liquidity Price" means the price per share equal to the Valuation Cap divided by the Liquidity Capitalization.

(k) "Liquidity Capitalization" means, immediately before the Liquidity Event and without double counting on an as-converted-to-Common-Stock basis: (i) all issued and outstanding Capital Stock; (ii) outstanding and promised awards to the extent receiving proceeds; and (iii) converting SAFEs, notes, and other convertible securities, except securities whose holders take cash-out or preference payments instead of as-converted proceeds. It excludes the unissued option pool.

(l) "Pro Rata Rights Agreement" means a written agreement between the Company and the Investor (and holders of other SAFEs, as appropriate) giving the Investor a right to purchase its pro rata share of private placements of securities by the Company occurring after the Equity Financing, subject to customary exceptions.

(m) "SAFE" means an instrument containing a future right to shares of Capital Stock, similar in form and content to this Agreement, purchased by investors for the purpose of funding the Company's business operations.

(n) "SAFE Preferred Stock" means the shares of Preferred Stock issued to the Investor upon conversion of this SAFE pursuant to Section 2.1.

(o) "SAFE Price" means the price per share equal to the Valuation Cap divided by the Company Capitalization.

(p) "Standard Preferred Stock" means the shares of Preferred Stock issued to investors investing new money in the Company in connection with the initial closing of the Equity Financing.

(q) "Valuation Cap" means the amount set forth in Section 1.2.

Article 2: Conversion Events

2.1 Equity Financing Conversion

(a) Automatic Conversion. Upon the closing of an 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) Conversion Price Calculation.

☐ Valuation Cap Only: The Conversion Price is the lower of the SAFE Price or the lowest price per share paid by new-money purchasers for Standard Preferred Stock.

☐ Valuation Cap and Discount: The Conversion Price is the lowest of:
(i) The SAFE Price;
(ii) The Discount Price; or
(iii) The lowest price per share paid by new-money purchasers for Standard Preferred Stock.

☐ Discount Only: The Conversion Price is the lower of the Discount Price or the lowest price per share paid by new-money purchasers for Standard Preferred Stock.

(c) SAFE Preferred Stock Terms. The SAFE Preferred Stock will have: (i) identical rights, privileges, preferences, and restrictions as the Standard Preferred Stock, except with respect to: (A) the per share liquidation preference and the initial conversion price for purposes of price-based anti-dilution protection, which will equal the Conversion Price; and (B) the basis for any dividend rights, which will be based on the Conversion Price.

(d) Post-Money Calculation Example:

• If Purchase Amount = $500,000
• Valuation Cap = $10,000,000 (Post-Money)
• Investor ownership = $500,000 / $10,000,000 = 5%
• This 5% is calculated before (pre) the new Equity Financing money, but after (post) all SAFE money.

2.2 Liquidity Event

(a) Conversion Options. If a Liquidity Event occurs before the termination of this SAFE, and this SAFE has not been previously converted pursuant to Section 2.1, the Investor may elect, at its sole discretion, by providing written notice to the Company prior to the closing of such Liquidity Event, either:

☐ Option 1 - Cash-Out: Receive a cash payment equal to the Purchase Amount; or

☐ Option 2 - Conversion: Receive a number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price.

(b) Payment Priority. The cash-out amount is junior to creditor claims and outstanding indebtedness, on parity with equal-priority cash-out or liquidation-preference payments on other SAFEs and Preferred Stock, and senior to Common Stock. If legally available proceeds are insufficient for equal-priority payments, those holders share ratably in proportion to their full entitlements.

(c) Conversion Election. If the Investor elects conversion, the Investor shall receive shares of Common Stock and be entitled to participate in the Liquidity Event proceeds on a pari passu basis with holders of Common Stock, calculated as if this SAFE had converted at the Liquidity Price.

2.3 Dissolution Event

(a) Payment Right. If a Dissolution Event occurs before the termination of this SAFE, and this SAFE has not been previously converted pursuant to Section 2.1 or 2.2, the Company shall pay an amount equal to the Purchase Amount to the Investor from the remaining assets of the Company legally available for distribution.

(b) Payment Priority. Payment under this Section is: (i) junior to creditor claims and outstanding indebtedness; (ii) on parity with equal-priority cash-out or liquidation-preference payments on other SAFEs and Preferred Stock; and (iii) senior to Common Stock, in every case subject to applicable dissolution law and assets legally available for distribution.

(c) Pro Rata Distribution. If the Company's remaining assets are insufficient to pay the full Purchase Amount to all SAFE holders, such assets shall be distributed pro rata among SAFE holders in proportion to their respective Purchase Amounts.

2.4 Termination

This SAFE will terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this SAFE) upon the earliest to occur of: (a) the issuance of shares to the Investor pursuant to Section 2.1 or 2.2; (b) the payment of amounts due to the Investor pursuant to Section 2.2 or 2.3; or (c) mutual written agreement of the Company and the Investor.

Article 3: Pro Rata Rights

3.1 Grant of Pro Rata Rights

(a) Eligibility. If the Investor is a "Major Investor" (as defined below), the Company shall provide the Investor with Pro Rata Rights.

(b) Major Investor Definition. "Major Investor" means any Investor with a Purchase Amount of at least $[________________________________] (typically $250,000 or more).

3.2 Pro Rata Rights Terms

(a) Right to Participate. Subject to the terms of the Pro Rata Rights Agreement, the Investor shall have the right, but not the obligation, to purchase its Pro Rata Share of any New Securities (as defined below) that the Company proposes to sell and issue after the closing of the Equity Financing.

(b) Pro Rata Share. The Investor's "Pro Rata Share" for purposes of this Agreement equals the ratio of: (i) the number of shares of Capital Stock owned by the Investor immediately prior to the issuance of New Securities (assuming full conversion of this SAFE and all other convertible securities); to (ii) the total number of shares of Capital Stock outstanding immediately prior to the issuance of New Securities (assuming full conversion of all convertible securities).

(c) New Securities. "New Securities" means any shares of Capital Stock, including Common Stock and Preferred Stock, whether now authorized or not, and rights, options, or warrants to purchase such shares, and securities of any type convertible into such shares; provided, however, that "New Securities" shall not include:
(i) Shares of Common Stock issuable upon conversion of any outstanding shares of Preferred Stock;
(ii) Shares of Common Stock and options to purchase Common Stock issued or issuable to employees, officers, directors, or consultants pursuant to plans or agreements approved by the Board;
(iii) Shares of Common Stock issued or issuable upon exercise of options or warrants outstanding as of the Effective Date;
(iv) Shares of Capital Stock issued in connection with a strategic transaction approved by the Board;
(v) Shares of Capital Stock issued in connection with an Initial Public Offering; or
(vi) Shares of Capital Stock issued as acquisition consideration.

3.3 Procedure

(a) Notice. The Company shall give the Investor written notice of its intention to issue New Securities at least [____] days (typically 15-30 days) prior to the proposed issuance, describing the type of New Securities, the price, and the general terms.

(b) Exercise. The Investor must exercise its Pro Rata Rights by delivering written notice to the Company within [____] days (typically 10-15 days) of receipt of the Company's notice.

(c) Expiration. Pro Rata Rights shall terminate upon the earlier of: (i) an Initial Public Offering; (ii) a Change of Control; or (iii) [____] years after the date of the Equity Financing (typically 3-5 years).

Article 4: Information Rights

4.1 Financial Information

Until the earlier of: (a) conversion or termination of this SAFE; or (b) a Liquidity Event, the Company shall deliver to Investors holding SAFEs with an aggregate Purchase Amount of at least $[________________________________] (typically $100,000 or more):

(a) Annual Financial Statements. Within [____] days (typically 90-120 days) after the end of each fiscal year, unaudited annual financial statements, including balance sheet, income statement, and statement of cash flows;

(b) Quarterly Updates. Within [____] days (typically 45 days) after the end of each fiscal quarter, a brief written update on the Company's business, operations, and financial condition; and

(c) Capitalization Table. Upon reasonable request, but not more than once per calendar quarter, an updated capitalization table reflecting all outstanding equity securities and convertible instruments.

4.2 Notice of Material Events

The Company shall provide prompt written notice to the Investor of:

(a) Any proposed Equity Financing;
(b) Any proposed Liquidity Event;
(c) Any proposed Dissolution Event;
(d) Any material litigation or regulatory action; and
(e) Any change in the Company's executive officers or directors.

4.3 Inspection Rights

Upon reasonable notice, the Investor shall have the right to inspect the Company's books and records during normal business hours, provided that such inspection shall not unreasonably interfere with the Company's operations.

Article 5: Most Favored Nation (MFN) Provisions

5.1 MFN Protection

[Include this section only if this is an MFN SAFE or if MFN rights are granted as an additional protection]

(a) Subsequent SAFE Terms. If the Company issues any subsequent SAFE (a "Subsequent SAFE") with terms more favorable to the investor thereof than the terms of this SAFE, the Company shall provide prompt written notice to the Investor, together with a copy of the Subsequent SAFE.

(b) Election to Amend. The Investor may elect, by providing written notice to the Company within [____] days (typically 10-15 days) of receipt of such notice, to amend this SAFE to include any or all of the more favorable terms contained in the Subsequent SAFE, including but not limited to:
(i) A lower Valuation Cap;
(ii) A higher Discount Rate;
(iii) Additional conversion events or triggers;
(iv) More favorable liquidation preferences; or
(v) Additional rights (e.g., information rights, pro rata rights, board observer rights).

(c) Automatic Amendment. If the Investor elects to amend this SAFE pursuant to this Section 5.1, this SAFE shall be deemed automatically amended to include such terms as of the date of issuance of the Subsequent SAFE.

5.2 Exclusions

The MFN protection shall not apply to:

(a) SAFEs issued to strategic investors in connection with commercial agreements;
(b) SAFEs issued to employees, officers, directors, or consultants as compensation;
(c) Differences in Purchase Amount;
(d) Differences solely attributable to the timing of investment; or
(e) SAFEs issued to investors in jurisdictions requiring modified terms.

Article 6: Company Representations and Warranties

The Company hereby represents and warrants to the Investor as of the Effective Date:

6.1 Organization and Standing

☐ The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of [________________________________].

☐ The Company has all requisite corporate power and authority to own and operate its properties and assets, to execute and deliver this SAFE, to issue the SAFE and to carry out the provisions of this SAFE.

6.2 Authorization

☐ All corporate action required to be taken by the Company's Board of Directors and stockholders in order to authorize the Company to enter into this SAFE has been taken or will be taken prior to the Effective Date.

☐ This SAFE, when executed and delivered by the Company, shall constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors' rights generally.

6.3 No Conflict

☐ The execution, delivery, and performance of this SAFE and the consummation of the transactions contemplated hereby will not: (i) result in any violation of, or conflict with, or constitute a default under, the Company's Certificate of Incorporation or Bylaws; (ii) result in any violation of any law, statute, rule, or regulation applicable to the Company; or (iii) result in any violation of, or conflict with, or constitute a default under, any agreement to which the Company is a party.

6.4 Capitalization

☐ The capitalization of the Company as of the Effective Date is as set forth in Exhibit A attached hereto (the "Capitalization Table"). Except as set forth in Exhibit A, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), or agreements for the purchase or acquisition from the Company of any shares of its capital stock or any securities convertible into or exchangeable for shares of its capital stock.

6.5 Valid Issuance

☐ The SAFE Preferred Stock, when issued, sold, and delivered in accordance with the terms of this SAFE, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under this SAFE, applicable state and federal securities laws, and liens or encumbrances created by or imposed by the Investor.

6.6 Compliance with Securities Laws

☐ Company securities counsel has selected and documented the applicable federal exemption and any state-law treatment. Investor representations do not create an exemption by themselves. A Rule 506 offering must separately satisfy the applicable Rule 501, Rule 502, Rule 503, and Rule 506 conditions, including the selected solicitation and purchaser rules, bad-actor diligence, Form D, and permitted state notices and fees.

6.7 Litigation

☐ There is no action, suit, proceeding, or investigation pending or, to the Company's knowledge, currently threatened against the Company that questions the validity of this SAFE or the right of the Company to enter into this SAFE.

Article 7: Investor Representations and Warranties

The Investor hereby represents and warrants to the Company as of the Effective Date:

7.1 Authorization

☐ The Investor has full power and authority to enter into this SAFE. This SAFE, when executed and delivered by the Investor, will constitute the valid and legally binding obligation of the Investor, enforceable against the Investor in accordance with its terms.

7.2 Purchase for Own Account

☐ The Investor is acquiring this SAFE and the underlying securities for the Investor's own account for investment purposes only, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof within the meaning of the Securities Act of 1933. The Investor has no present intention of selling, granting any participation in, or otherwise distributing the same.

7.3 Accredited Investor Status

☐ The Investor is an "accredited investor" as such term is defined in Rule 501 of Regulation D under the Securities Act of 1933, and has completed the Accredited Investor Questionnaire attached hereto as Exhibit B.

7.4 Risk Acknowledgment

☐ The Investor recognizes that the purchase of this SAFE involves a high degree of risk, including the following:

(a) The Company has a limited operating history and may never achieve profitability;
(b) An investment in this SAFE is highly speculative and only investors who can afford the loss of their entire investment should consider investing;
(c) The Investor may not be able to liquidate this investment;
(d) Transferability of this SAFE is extremely limited;
(e) The Company may need to raise additional capital, which may result in dilution;
(f) The tax consequences of an investment in this SAFE are complex and the Investor should consult a tax advisor; and
(g) There is no guarantee that the SAFE will convert into equity or that the Investor will receive any return on investment.

7.5 Access to Information

☐ The Investor has had an opportunity to ask questions of, and receive answers from, the Company's officers and directors concerning the Company, its business, and the terms and conditions of this SAFE, and to obtain any additional information necessary to verify the accuracy of the information provided.

7.6 No General Solicitation

☐ The Investor did not learn of this investment through any form of general solicitation or general advertising, including but not limited to any article, notice, advertisement, or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio; or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

[Note: This representation should be modified if the offering is made pursuant to Rule 506(c), which permits general solicitation]

7.7 Non-U.S. Person Representations

[Include if Investor is not a U.S. person]

☐ The Investor is not a U.S. Person as defined in Regulation S under the Securities Act of 1933.

☐ The Investor is acquiring this SAFE in an offshore transaction in compliance with Regulation S.

Article 8: Transfer Restrictions

8.1 Restrictions on Transfer

This SAFE and the securities issuable upon conversion hereof may not be offered, sold, assigned, transferred, pledged, encumbered, or otherwise disposed of (each, a "Transfer") except:

(a) To the Company;

(b) Pursuant to a registration statement that has been declared effective under the Securities Act of 1933;

(c) To an "accredited investor" as defined in Rule 501(a) of Regulation D in a transaction exempt from registration under the Securities Act of 1933; or

(d) To a "qualified institutional buyer" as defined in Rule 144A under the Securities Act of 1933.

8.2 Company Consent

Notwithstanding Section 8.1, no Transfer shall be made without the prior written consent of the Company, which consent shall not be unreasonably withheld; provided, however, that the Investor may Transfer this SAFE without the Company's consent to:

(a) An Affiliate of the Investor (as defined below);
(b) Any trust for the direct or indirect benefit of the Investor or the Investor's immediate family members;
(c) The Investor's spouse, parents, siblings, or lineal descendants; or
(d) A beneficiary, heir, or estate of the Investor upon the Investor's death.

"Affiliate" means, with respect to any specified person, any other person who, directly or indirectly, controls, is controlled by, or is under common control with such person, including any partner, member, stockholder, director, officer, or employee of such person.

8.3 Legends

The Company may place the following legend on any certificate or other document evidencing this SAFE or the securities issuable upon conversion hereof:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS."

Article 9: Miscellaneous

9.1 Governing Law

This SAFE shall be governed by and construed in accordance with the laws of the State of [________________________________], without giving effect to the principles of conflict of laws thereof.

9.2 Dispute Resolution

(Select one):

☐ Arbitration. Any dispute arising out of or relating to this SAFE shall be resolved by binding arbitration in [________________________________] in accordance with the rules of the American Arbitration Association. The decision of the arbitrator(s) shall be final and binding upon the parties and judgment may be entered thereon in any court of competent jurisdiction.

☐ Litigation. Any dispute arising out of or relating to this SAFE shall be brought exclusively in the state or federal courts located in [________________________________], and each party hereby consents to the personal jurisdiction of such courts.

9.3 Successors and Assigns

The terms and conditions of this SAFE shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. The Company may not assign this SAFE or any rights or obligations hereunder without the prior written consent of the Investor. Subject to Article 8, the Investor may assign this SAFE to any permitted transferee.

9.4 Entire Agreement

This SAFE, together with all Exhibits hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, relating to such subject matter.

9.5 Amendments and Waivers

Any term of this SAFE may be amended and the observance of any term may be waived only with the written consent of the Company and the Investor. Any such amendment or waiver shall be binding upon the Company, the Investor, and their respective successors and assigns.

9.6 Severability

If any provision of this SAFE is held to be unenforceable under applicable law, such provision shall be excluded from this SAFE and the balance of the SAFE shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

9.7 Notices

All notices required or permitted under this SAFE shall be in writing and shall be deemed delivered: (a) when delivered personally; (b) when sent by confirmed email; (c) five (5) business days after being sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) business day after deposit with a nationally recognized overnight courier, specifying next-day delivery.

If to the Company:
[________________________________]
[________________________________]
[________________________________]
Email: [________________________________]
Attention: [________________________________]

If to the Investor:
[________________________________]
[________________________________]
[________________________________]
Email: [________________________________]

9.8 Counterparts

This SAFE may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Electronic signatures (including PDF and DocuSign) shall be deemed original signatures for all purposes.

9.9 No Stockholder Rights

The Investor shall not have any rights as a stockholder of the Company with respect to this SAFE until shares of Capital Stock are issued upon conversion of this SAFE.

9.10 Tax Treatment

The parties intend to report this SAFE consistently as a non-compensatory equity-linked instrument to the extent supportable under applicable tax law. This is an agreed reporting intent, not a representation that a tax authority will characterize the SAFE as an option, stock, indebtedness, or any particular class of property. Each party should obtain independent tax advice and may take a different position when required by law.

9.11 Attorney Fees

If any action at law or in equity is necessary to enforce or interpret the terms of this SAFE, the prevailing party shall be entitled to reasonable attorneys' fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.

Signatures

IN WITNESS WHEREOF, the parties have executed this SAFE as of the Effective Date.

COMPANY:

[________________________________]
a [________________________________] corporation

By: [________________________________]

Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

INVESTOR:

☐ If Individual:

[________________________________]
(Signature)

[________________________________]
(Printed Name)

Date: [__/__/____]

☐ If Entity:

[________________________________]
a [________________________________]

By: [________________________________]

Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

Exhibit A: Capitalization Table

As of [__/__/____]

Common Stock

Preferred Stock

Reserved Option Pool

Outstanding Convertible Securities

Fully Diluted Capitalization Summary

Exhibit B: Accredited Investor Questionnaire

IMPORTANT: Use this questionnaire as a diligence record only after securities counsel selects the exemption. Rule 506(b) can include counted non-accredited purchasers who satisfy its sophistication and information conditions. Rule 506(c) requires every purchaser to be accredited and the issuer to take reasonable verification steps; a questionnaire or self-certification alone is not a universal verification safe harbor.

Part I: Individual Investors

Complete this section if you are investing as an individual or jointly with a spouse/partner.

A. Income Test

☐ I had individual income (excluding any income attributable to my spouse) in excess of $200,000 in each of the two most recent calendar years (20[__] and 20[__]) and reasonably expect individual income in excess of $200,000 in the current calendar year (20[__]).

☐ My spouse/partner and I had joint income in excess of $300,000 in each of the two most recent calendar years (20[__] and 20[__]) and reasonably expect joint income in excess of $300,000 in the current calendar year (20[__]).

B. Net Worth Test

☐ I have (individually or together with my spouse/partner) a net worth in excess of $1,000,000, excluding the value of my primary residence.

Note: In calculating net worth: (i) the value of your primary residence shall not be included as an asset; (ii) indebtedness secured by your primary residence, up to the estimated fair market value of your primary residence, shall not be included as a liability; and (iii) indebtedness secured by your primary residence in excess of the estimated fair market value of your primary residence shall be included as a liability.

C. Professional Certification Test

☐ I hold one or more of the following professional certifications, designations, or credentials in good standing:
☐ Series 7 - General Securities Representative License
☐ Series 65 - Investment Adviser Representative License
☐ Series 82 - Private Securities Offerings Representative License
☐ Other SEC-designated credential: [________________________________]

D. Knowledgeable Employee Test

☐ I am a "knowledgeable employee" as defined in Rule 3c-5(a)(4) of the Investment Company Act of 1940 with respect to the Company.

E. Family Office Test

☐ I am a "family client" of a "family office" (as those terms are defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940) that: (i) has assets under management in excess of $5,000,000; (ii) is not formed for the specific purpose of acquiring the securities offered; and (iii) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment.

Part II: Entity Investors

Complete this section if you are investing as an entity (corporation, LLC, partnership, trust, etc.).

A. Entity Type

☐ Bank, savings and loan association, insurance company, registered investment company, business development company, or small business investment company

☐ Employee benefit plan with total assets in excess of $5,000,000

☐ Private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940

☐ Corporation, partnership, LLC, or business trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered

☐ Trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, and whose purchase is directed by a sophisticated person

☐ Entity in which all of the equity owners are individually accredited investors

☐ Family office with assets under management in excess of $5,000,000

☐ Investment adviser (registered under the Investment Advisers Act or state law, or exempt reporting adviser)

☐ Rural business investment company as defined in the Consolidated Farm and Rural Development Act

☐ Entity (other than a trust) owning investments (as defined in Rule 2a51-1(b) of the Investment Company Act) in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered

Part III: Certification

I certify that:

1. The information provided in this questionnaire is true, complete, and correct to the best of my knowledge and belief.

2. I will notify the Company immediately if any of the information provided herein becomes inaccurate prior to the closing of my investment.

3. I understand that the Company is relying on this questionnaire in determining my eligibility to invest and in determining compliance with securities registration exemptions.

4. I consent to the Company verifying my accredited investor status by any reasonable means permitted by SEC rules.

Investor Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

Exhibit C: Form D Filing Requirements

Federal SEC Form D Filing

Filing Requirement: The Company must file Form D with the SEC within 15 days after the first sale of securities in the offering.

Amendment Requirements: The Company must file an amendment to Form D:

• Annually, on or before the first anniversary of the most recent previously filed Form D
• To correct a material mistake of fact or error
• To reflect a material change in information previously provided

No Filing Fee: The SEC does not charge a filing fee for Form D.

Filing Checklist

☐ Company legal name and previous names (if any)
☐ Company address and phone number
☐ Related persons (executive officers, directors, promoters)
☐ Industry group classification
☐ Issuer size (revenue range, aggregate net asset value)
☐ Federal exemption(s) relied upon (Rule 504, 506(b), or 506(c))
☐ Type of filing (new notice, amendment)
☐ Duration of offering
☐ Type(s) of securities offered
☐ Minimum investment accepted from any outside investor
☐ Total offering amount
☐ Total amount sold
☐ Total remaining to be sold
☐ Number of accredited investors who have invested
☐ Number of non-accredited investors who have invested
☐ Sales compensation information

Exhibit D: State Blue Sky Compliance Notes

California

Governing Law: California Corporations Code Section 25102(f)

Exemption Requirements:

• Limited to sales to persons with a preexisting personal or business relationship with officers/directors, or who are "accredited investors"
• Maximum of 35 purchasers (excluding accredited investors)
• No general advertising or public solicitation
• Securities must be purchased for investment, not distribution

Filing Requirements:

• File Notice of Transaction Pursuant to Section 25102(f) with the California Department of Financial Protection and Innovation (DFPI)
• Filing due within 15 calendar days after the first sale to a California resident
• Filing fee: $300 (as of 2024)

Federal Preemption: If relying on Rule 506(b) or 506(c), the offering is exempt from California qualification requirements under NSMIA, but notice filing and fee are still required.

Texas

Governing Law: Texas Securities Act; Texas Administrative Code Rule 139.16

Exemption Requirements:

• Rule 139.16 Individual Accredited Investor Exemption: Sales only to "accredited investors" as defined by SEC Rule 501
• Sales must be made by the issuer or by a registered dealer
• No general solicitation (unless relying on federal Rule 506(c))

Filing Requirements:

• File notice with the Texas State Securities Board after first sale to a Texas resident
• For Rule 506 offerings: file copy of SEC Form D and pay applicable fee
• Blue sky filing due within 15 days of first Texas sale

Federal Preemption: Rule 506 offerings are federally covered securities under NSMIA; Texas may not impose registration requirements but requires notice filing and enforces anti-fraud provisions.

New York

Governing Law: New York General Business Law Article 23-A (Martin Act)

Unique Characteristics:

• New York does not require registration of securities (except real estate offerings, theatrical syndications, and intrastate offerings)
• Instead requires issuers to register as "dealers in their own securities"
• Federal preemption under NSMIA applies to Rule 506 offerings

Filing Requirements:

• For Rule 506 offerings: file notice through NASAA's Electronic Filing Depository (EFD)
• File copy of SEC Form D and Consent to Service of Process
• Filing fee required (varies based on offering size)
• All filings must be made through EFD as of December 2024

Martin Act Considerations: The Martin Act grants the New York Attorney General broad powers to investigate securities fraud. Issuers should maintain accurate records and representations.

Delaware

Governing Law: Delaware Securities Act, 6 Del. C. Chapter 73

Exemption Requirements:

• Section 73-207(b)(9): Transaction exemption for sales to not more than 25 persons in Delaware during any 12-month period, where buyers are purchasing for investment
• Section 73-207(b)(11): Small offering exemption for offerings up to $1,000,000 (with limitations)
• Delaware Admin. Code 200-E-503: Accredited investor exemption

Filing Requirements:

• For Rule 506 offerings: file Form D notice and Consent to Service of Process
• Filing due within 15 days after first sale to Delaware resident
• Filing fee: $200 minimum, up to $1,000 (0.5% of offering amount in Delaware)

Federal Preemption: Rule 506 offerings are federally covered securities and exempt from Delaware registration requirements, but notice filing is required.

General Notes for All States

1. Timing: State filings are generally due within 15 days after the first sale to a resident of that state.

2. NASAA EFD: Many states now accept (or require) filing through the North American Securities Administrators Association's Electronic Filing Depository (EFD).

3. Ongoing Requirements: Some states require annual renewal filings or amendments for material changes.

4. Anti-Fraud Provisions: Even where federal preemption applies, all states retain authority to enforce anti-fraud provisions.

5. Counsel Required: Due to the complexity and variation in state requirements, consultation with securities counsel licensed in each applicable state is strongly recommended.

Exhibit E: Wire Transfer Instructions

For Company Use:

Bank Name: [________________________________]

Bank Address: [________________________________]

Account Name: [________________________________]

Account Number: [________________________________]

Routing Number (ABA): [________________________________]

SWIFT Code (for international transfers): [________________________________]

Reference/Memo: [________________________________] SAFE Investment

Wire Transfer Confirmation:

The Investor shall provide written confirmation to the Company upon completion of the wire transfer, including:

• Date of transfer
• Amount transferred
• Originating bank name
• Transaction reference number

Alternative Payment Methods:

☐ Check (payable to: [________________________________])
☐ ACH Transfer (provide separate ACH instructions)
☐ Other: [________________________________]

This template reflects current Y Combinator SAFE standards as of 2024 and general securities law requirements. Securities laws vary by jurisdiction and change frequently. This document does not constitute legal advice. Consult with qualified securities counsel before using this template.