One-pager on key clauses + free template links.
Running a SAFE round should be fast and clean. This one‑pager turns the legal pack into a checklist: what you actually need, which clauses matter, and where founders trip up. We also cover pre‑ vs post‑money SAFEs, closing steps, and UAE/GCC notes. This is information, not legal advice—work with counsel.
Key takeaways: Use standard post‑money SAFEs and keep edits minimal. Send a tight pack (SAFE + company info + cap table) and agree the cap + discount early. Close in batches and keep your cap‑table up to date.
Keep it standard, keep it fast, and keep the cap table clean.
Use standard post‑money SAFEs with minimal edits; send a simple pack (SAFE, company info, cap table), agree the cap/discount, and close in batches with countersigned PDFs.
Keep terms simple: valuation cap, discount (if any), MFN only if necessary, and pro‑rata side letter for larger cheques. Avoid bespoke clauses that break standard conversions at your next equity round.
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Pre‑money vs post‑money SAFE (what changes)
A standard post‑money SAFE, your company info sheet, a clean cap table, board approvals if required, and wiring instructions. Optional: pro‑rata side letter and investor rights letter.
Put it in one folder: (1) post‑money SAFE (YC template), (2) company info (entity, registered office, directors), (3) cap table (fully diluted), (4) resolutions/consents if your constitution requires them, and (5) bank/wiring details.
Focus on valuation cap, discount, MFN, pro‑rata rights, and conversion mechanics at equity financing or liquidity event.
Cap and discount determine pricing. MFN lets an investor adopt better terms you later offer. Pro‑rata rights can be in the SAFE or a side letter. The post‑money SAFE defines how the SAFE converts into shares at the priced round; keep it standard to avoid surprises.
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Post‑money SAFEs make ownership more predictable—each SAFE counts toward the post‑money, so dilution is easier to model.
Pre‑money SAFEs could underestimate dilution when multiple notes convert. Post‑money SAFEs fix this by defining ownership on a post‑money basis. If you already have pre‑money SAFEs, model both cases before you set a new cap.
Countersign each SAFE, log the details (investor, amount, SAFE type, cap/discount), update your cap table, and store everything in one place.
Send signature‑ready PDFs and wiring details. On receipt, execute the SAFE, send countersigned copies, and issue receipts. Keep a master register of SAFEs and ensure board/consent requirements are met.
Confirm which entity issues the SAFE (onshore vs free‑zone), the governing law of the document, and any local approvals or foreign ownership rules.
Many startups use DIFC/ADGM holding entities with standard US/English‑law docs. Work with counsel on enforceability, FX/currency for wires, and any local shareholder consent requirements.
Make the data room instant: INP ≤200 ms, LCP ≤2.5 s, CLS ≤0.1; compress PDFs and reserve space for embeds.
Provide a fast web view and a downloadable PDF. Preconnect to your CDN, set width/height on images, and keep hero images ≤150 KB WebP.
Related reads: Seed Data‑room Checklist, Negotiating Term‑sheet Valuation, Runway Calculator.
Post‑money SAFEs make ownership predictable—use that to sanity‑check dilution now.
For each SAFE, compute Investor % ≈ Investment / PostMoneyCap (simplified). Sum all open SAFEs to estimate total SAFE ownership at the priced round. Stress‑test two cases: (1) round at/below the cap; (2) round above the cap (discount applies, if any). Keep an ESOP refresh placeholder so your post‑Series A ownership isn’t a surprise.
Keep side letters short and consistent.
Pro‑rata rights promise the investor the chance to maintain ownership in future rounds. Make the language consistent across investors and align with your future lead’s pro‑rata mechanics. Information rights typically mirror what you plan to give anyway (quarterly updates, annual accounts). Avoid custom vetoes and governance add‑ons at the SAFE stage.
Batch the close so you aren’t reconciling daily.
Bespoke edits, mixing pre‑ and post‑money without modelling, and vague cap tables.
Fix by using one standard template, modelling legacy pre‑money SAFEs before setting new caps, and sending a clear fully‑diluted cap table with ESOP location stated.
Start with these and ask counsel to confirm fit.
Run this before you email investors.
SAFE: Simple Agreement for Future Equity. Cap: valuation ceiling for conversion. Discount: % reduction vs next round price. MFN: right to adopt better terms later offered. Pro‑rata: right to maintain ownership in future rounds.
Two SAFEs, one cap.
You set a $12m post‑money cap. Investor A invests $300k (post‑money SAFE): indicative ownership ≈ 2.5%. Investor B invests $700k: ≈ 5.8%. Total SAFE ownership ≈ 8.3% pre‑Series A (ignoring discount). If the Series A is priced at a $16m pre and you refresh ESOP by 8–10%, run the model to show founder ownership after the round—before you send the cap to investors.
Short, specific, and signature‑ready.
Name files consistently and keep a master register.
Use YYYY‑MM‑DD_INVESTOR_SAFE_post‑money_$Amount.pdf for executed docs. Keep a register with investor name, amount, date, SAFE type, cap/discount, and wire receipt ID. File board minutes and any consents promptly. This makes your priced round diligence faster.
Short answers on SAFE docs.
Want a lawyer‑ready SAFE pack and cap‑table model?
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