# SAFE

Concept · [Fundraising and equity](https://ecosystem.samcarlton.com/fundraising)

Also called: simple agreement for future equity, SAFE note, SAFEs, post-money SAFE, YC SAFE

Simple agreement for future equity. An investor gives the company money now in [exchange](https://ecosystem.samcarlton.com/turn) for the right to receive [shares](https://ecosystem.samcarlton.com/equity) later, usually when the company raises a [priced round](https://ecosystem.samcarlton.com/priced-round). It is not a [loan](https://ecosystem.samcarlton.com/small-business-loan): there is no interest and no date it must be paid back.

**For example:** An [angel investor](https://ecosystem.samcarlton.com/angel-investor) puts money in through a SAFE today. When the company later raises a [Series A](https://ecosystem.samcarlton.com/series-a), the SAFE [turns](https://ecosystem.samcarlton.com/turn) into [shares](https://ecosystem.samcarlton.com/equity) under the terms written in it.

## Connects to (10)

- [Convertible note](https://ecosystem.samcarlton.com/convertible-note): A loan from an investor that is meant to turn into shares later instead of being paid back in cash.
- [Valuation cap](https://ecosystem.samcarlton.com/valuation-cap): A term in a SAFE or convertible note that sets the highest valuation used to work out how many shares the investor gets when it converts.
- [Equity](https://ecosystem.samcarlton.com/equity): Ownership in a company.
- [Priced round](https://ecosystem.samcarlton.com/priced-round): A fundraising round where investors buy shares at a set price per share, which fixes the valuation of the company.
- [Angel investor](https://ecosystem.samcarlton.com/angel-investor): An individual who invests their own money in a very young company, usually in exchange for equity or through a SAFE or convertible note.
- [Pre-seed](https://ecosystem.samcarlton.com/pre-seed): The earliest outside money a startup raises, often before the product is finished or has customers.
- [Pro rata rights](https://ecosystem.samcarlton.com/pro-rata): An investor's right to buy enough shares in a later round to keep the same percentage of the company.
- [Accredited investor](https://ecosystem.samcarlton.com/accredited-investor): A person or organization that meets tests set by the US securities regulator, the SEC, based on income, net worth or professional…
- [Y Combinator](https://ecosystem.samcarlton.com/y-combinator): A startup accelerator.
- [gener8tor](https://ecosystem.samcarlton.com/gener8tor): An accelerator company that runs programs in cities across the United States, including Oklahoma City.

> This glossary is plain-language orientation, not legal or financial advice. Before you decide on a company structure, a contract, taxes or a fundraising deal, talk with a lawyer or an accountant.

Map view: https://ecosystem.samcarlton.com/safe