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A Simple Agreement for Future Equity (SAFE) lets startups raise quick funding without immediately setting a company valuation or issuing shares. It's a popular alternative to convertible notes in Pakistan's growing tech ecosystem, offering investors the right to future equity when specific events occur, like a priced funding round.

Under Pakistani company law, SAFEs give investors a simplified path to potential ownership while helping founders maintain control during early stages. The agreement typically converts to shares at a discount rate when the startup secures qualified financing, gets acquired, or goes public. Unlike traditional debt instruments, SAFEs don't accumulate interest or have maturity dates, making them attractive for early-stage Pakistani ventures.

Use a Simple Agreement for Future Equity when your Pakistani startup needs quick capital but isn't ready to set a firm valuation. This funding tool works especially well during pre-seed and seed rounds, when traditional equity deals might be too complex or premature. It's particularly valuable for tech companies and innovative ventures that need runway to prove their business model.

The ideal timing is when you have promising growth potential but limited operating history to determine a fair company value. Pakistani entrepreneurs often choose SAFEs to secure early funding from angel investors while maintaining flexibility for future funding rounds. The agreement becomes especially useful when you expect a larger priced round within 12-24 months.

• Valuation Cap SAFEs: Most common in Pakistan's startup scene - sets a maximum price for converting investment to equity, protecting early investors during future funding rounds
• Discount SAFEs: Offers investors a percentage discount on future equity prices, typically 10-30% off the next round's valuation
• MFN (Most Favored Nation) SAFEs: Automatically gives investors the best terms offered to any later SAFE investors
• Post-Money SAFEs: Calculates ownership based on the company's post-money valuation, providing clearer terms for Pakistani investors and founders
• Hybrid SAFEs: Combines both valuation caps and discounts, common among Pakistani tech startups seeking flexible funding terms

• Startup Founders: Create and offer SAFEs to raise capital while maintaining control and flexibility in early stages
• Angel Investors: Provide funding through SAFEs to gain future equity rights in promising Pakistani startups
• Corporate Lawyers: Draft and customize SAFE agreements to protect both parties' interests under Pakistani law
• Venture Capital Firms: Use SAFEs for quick deployment of capital into early-stage companies before formal valuation
• Company Secretaries: Maintain records of SAFE agreements and ensure compliance with Pakistani corporate regulations
• Financial Advisors: Guide clients on SAFE terms, valuation caps, and conversion mechanisms

• Company Details: Gather incorporation certificate, NTN number, and current capitalization table
• Investment Terms: Define the investment amount, valuation cap, and any discount rate
• Conversion Triggers: Specify qualifying financing rounds, exit events, or dissolution scenarios
• Investor Information: Collect legal name, CNIC/registration details, and contact information
• Board Approval: Secure formal board resolution authorizing SAFE issuance
• Securities Laws: Verify compliance with SECP regulations for private placements
• Digital Platform: Use our automated system to generate a legally-sound SAFE agreement tailored to Pakistani law

• Investment Details: Clear statement of purchase amount and type of future equity rights
• Conversion Terms: Specific triggers, valuation cap, and discount rate formulas
• Party Information: Complete legal names, addresses, and registration numbers of company and investor
• Rights Description: Detailed explanation of investor's future equity rights and limitations
• SECP Compliance: References to relevant Pakistani securities laws and regulations
• Governing Law: Explicit choice of Pakistani law and jurisdiction
• Signature Block: Authorized signatory details and company seal requirements
• 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 Pakistani law. While both involve company ownership, their timing, structure, and implications vary considerably.

• Immediate vs. Future Rights: SAFEs only promise future equity upon specific trigger events, while Equity Agreements create immediate shareholding rights and obligations
• Valuation Requirements: SAFEs don't need a current company valuation, making them ideal for early-stage startups, whereas Equity Agreements require a defined company value
• Governance Rights: Equity Agreements typically grant immediate voting and participation rights; SAFE holders must wait until conversion to exercise such rights
• Documentation Complexity: SAFEs are intentionally simpler, requiring fewer corporate approvals and SECP filings compared to full Equity Agreements
• Risk Profile: SAFE investors face higher uncertainty but potentially greater returns, while Equity Agreement holders receive established shareholder protections