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A Simple Agreement for Future Equity (SAFE) lets startups raise quick funding by promising investors future shares instead of immediate equity. It's a modern alternative to convertible notes that's gaining popularity among Dutch tech companies and early-stage investors.

Under Dutch corporate law, a SAFE converts to shares when specific events occur, like a funding round or company sale. Unlike traditional loans, it doesn't accumulate interest or have a maturity date, making it attractive for cash-strapped startups. The agreement typically includes a valuation cap and discount rate to protect investor interests while keeping things simple for founders.

Consider a Simple Agreement for Future Equity when your startup needs quick capital but isn't ready for a formal valuation. This tool works particularly well for Dutch tech companies in pre-revenue stages, especially when traditional bank financing isn't available and you want to avoid the complexity of convertible notes.

SAFEs make the most sense during bridge funding rounds, when you're expecting a larger financing round within 6-18 months. They're ideal if you need to close deals quickly with multiple investors, as the standardized format speeds up negotiations. Just ensure your company's articles of association allow for future share issuance under Dutch corporate law.

• Valuation Cap SAFE: Sets a maximum company value for conversion, popular among Dutch tech investors who want upside protection
• Discount SAFE: Offers a percentage discount on the next funding round's share price, common in early-stage Dutch startups
• MFN (Most Favored Nation) SAFE: Automatically updates terms if better ones are offered to later investors, used by cautious angel investors
• Basic SAFE: Simple version without valuation caps or discounts, ideal for quick, straightforward fundraising under Dutch law
• Post-Money SAFE: Clarifies ownership percentages based on the company's post-money valuation, reducing dilution confusion

• Startup Founders: Use SAFEs to secure early funding without immediate dilution or complex negotiations about company valuation
• Angel Investors: Provide capital through SAFEs to get future equity rights with potential upside in promising Dutch startups
• Legal Counsel: Draft and review SAFE agreements to ensure compliance with Dutch corporate law and protect client interests
• Corporate Secretaries: Maintain records of outstanding SAFEs and handle conversion documentation during qualifying events
• Board Members: Approve SAFE issuance and oversee conversion terms during subsequent funding rounds

• Company Details: Gather your KvK registration, articles of association, and current cap table
• Investment Terms: Define the investment amount, valuation cap, and any discount rate
• Conversion Triggers: Specify qualifying events like equity rounds or exits that will trigger conversion
• Investor Information: Collect investor KYC details, tax residency, and investment entity structure
• Board Approval: Secure necessary corporate approvals per your articles of association
• Documentation Platform: Use our platform to generate a legally-sound SAFE that includes all mandatory elements under Dutch law

• Investment Terms: Clearly state the purchase amount and any valuation cap or discount rate
• Conversion Mechanics: Detail the specific events triggering equity conversion and calculation method
• Party Information: Full legal names, addresses, and registration numbers of company and investor
• Share Rights: Define the type and class of shares to be issued upon conversion
• Governing Law: Explicit statement of Dutch law application and jurisdiction
• Representations: Company's authority to issue SAFE and investor's sophistication confirmation
• Amendment Terms: Procedures for modifying agreement with mutual consent

A Simple Agreement for Future Equity (SAFE) differs significantly from an Equity Agreement in several key aspects under Dutch law. While both involve company ownership, they serve distinct purposes and operate differently in practice.

• Timing of Ownership: SAFEs promise future equity without immediate share issuance, while Equity Agreements transfer ownership rights immediately
• Valuation Requirements: SAFEs can be issued without determining company valuation, whereas Equity Agreements require a defined current valuation
• Legal Complexity: SAFEs use simpler documentation and fewer formalities under Dutch corporate law, making them faster to execute than full Equity Agreements
• Rights and Obligations: Equity Agreements grant immediate shareholder rights and voting powers; SAFEs only provide conversion rights until a triggering event occurs
• Cost and Speed: SAFEs typically involve lower legal fees and faster closing times compared to traditional Equity Agreements