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Simple agreement for future equity (SAFE)

Index Simple agreement for future equity (SAFE)

A SAFE (simple agreement for future equity) is an agreement between an investor and a company that provides rights to the investor for future equity in the company similar to a warrant, except without determining a specific price per share at the time of the initial investment. [1]

11 relations: Company, Convertible bond, Equity (finance), Investment, Investor, Liquidation, Price, Share (finance), Startup company, Warrant (finance), Y Combinator.

Company

A company, abbreviated as co., is a legal entity made up of an association of people for carrying on a commercial or industrial enterprise.

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Convertible bond

In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value.

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Equity (finance)

In accounting, equity (or owner's equity) is the difference between the value of the assets and the value of the liabilities of something owned.

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Investment

In general, to invest is to allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future – for example, investment in durable goods, in real estate by the service industry, in factories for manufacturing, in product development, and in research and development.

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Investor

An investor is a person that allocates capital with the expectation of a future financial return.

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Liquidation

In United Kingdom, Republic of Ireland and United States law and business, liquidation is the process by which a company is brought to an end.

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Price

In ordinary usage, a price is the quantity of payment or compensation given by one party to another in return for one unit of goods or services.

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Share (finance)

In financial markets, a share is a unit used as mutual funds, limited partnerships, and real estate investment trusts.

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Startup company

A startup company (startup or start-up) is an entrepreneurial venture which is typically a newly emerged business that aims to meet a marketplace need by developing a viable business model around a product, service, process or a platform.

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Warrant (finance)

In finance, a warrant is a security that entitles the holder to buy the underlying stock of the issuing company at a fixed price called exercise price until the expiry date.

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Y Combinator

Y Combinator is an American seed accelerator, started in March 2005.

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SAFE (Simple Agreement for Future Equity).

References

[1] https://en.wikipedia.org/wiki/Simple_agreement_for_future_equity_(SAFE)

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