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Simple Agreement for Future Tokens
I need a Simple Agreement for Future Tokens for an early-stage blockchain project, where investors will receive tokens in the future upon the project's launch. The agreement should outline the terms of token allocation, vesting schedule, and compliance with New Zealand's financial regulations, with a focus on protecting both parties' interests.
What is a Simple Agreement for Future Tokens?
A Simple Agreement for Future Tokens (SAFT) lets investors fund blockchain projects now in exchange for tokens later, once the network launches. It works like a forward contract, giving early backers special access to future cryptocurrency tokens while helping startups raise capital under New Zealand securities laws.
SAFTs help blockchain companies navigate regulatory compliance by treating the initial investment as a security, while the delivered tokens can function as utilities on the platform. This structure appeals to professional investors and venture funds looking to support Kiwi crypto projects, though they must meet qualified investor requirements under the Financial Markets Conduct Act.
When should you use a Simple Agreement for Future Tokens?
Use a Simple Agreement for Future Tokens when launching a blockchain project that needs early funding but your tokens aren't ready for distribution. It's particularly valuable for New Zealand startups developing decentralized platforms who want to raise capital from qualified investors while staying compliant with the Financial Markets Conduct Act.
This agreement works best when your token will have clear utility on your platform once it launches, and you need a legally sound way to structure early investment rounds. It helps avoid regulatory issues by treating the initial investment phase separately from the eventual token distribution, making it easier to demonstrate compliance to the Financial Markets Authority.
What are the different types of Simple Agreement for Future Tokens?
- Standard SAFT: Basic agreement with fixed token price and distribution timeline, suitable for most blockchain startups
- Tiered SAFT: Offers different investment levels with varying token prices and vesting schedules
- Conditional SAFT: Links token distribution to specific project milestones or regulatory approvals
- Hybrid SAFT: Combines token rights with traditional equity elements, common in NZ fintech ventures
- Multi-Token SAFT: Covers future distribution of multiple token types within the same ecosystem
Who should typically use a Simple Agreement for Future Tokens?
- Blockchain Startups: Issue SAFTs to raise capital for developing their platforms while ensuring regulatory compliance
- Qualified Investors: Purchase future tokens through SAFTs, typically requiring certification under NZ's investor laws
- Legal Counsel: Draft and review agreements to ensure compliance with Financial Markets Conduct Act requirements
- Financial Advisors: Guide clients on SAFT investments and associated risks within NZ's regulatory framework
- Compliance Officers: Monitor SAFT implementation and ensure ongoing adherence to securities regulations
How do you write a Simple Agreement for Future Tokens?
- Project Details: Document your token's utility, technical specifications, and planned launch timeline
- Investment Terms: Define token price, distribution schedule, and any vesting periods
- Investor Verification: Gather proof that participants meet NZ's qualified investor requirements
- Platform Details: Outline your blockchain network's functionality and token economics
- Compliance Check: Review Financial Markets Authority guidelines and securities regulations
- Risk Disclosures: List potential project risks, market factors, and regulatory considerations
What should be included in a Simple Agreement for Future Tokens?
- Token Description: Detailed specifications of the future tokens and their utility function
- Investment Terms: Purchase price, total amount, and qualifying investor declarations
- Distribution Conditions: Token delivery timeline and network launch requirements
- Compliance Statements: References to Financial Markets Conduct Act and securities regulations
- Risk Disclosures: Project-specific and market risks affecting token value
- Termination Rights: Conditions for agreement cancellation and refund procedures
- Governing Law: Explicit statement of New Zealand jurisdiction and applicable regulations
What's the difference between a Simple Agreement for Future Tokens and a Simple Agreement for Future Equity?
A Simple Agreement for Future Tokens (SAFT) differs significantly from a Simple Agreement for Future Equity (SAFE) in several key aspects, though both are investment instruments used by early-stage companies in New Zealand.
- Investment Output: SAFTs promise future cryptocurrency tokens, while SAFEs convert to company shares
- Regulatory Framework: SAFTs specifically align with cryptocurrency and securities regulations, whereas SAFEs fall under traditional equity investment rules
- Trigger Events: SAFTs activate upon network launch or token creation, but SAFEs convert during equity funding rounds
- Market Application: SAFTs are exclusively for blockchain projects, while SAFEs suit any startup seeking equity investment
- Investor Rights: SAFTs typically don't include voting or governance rights, unlike SAFEs which may lead to shareholder privileges
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