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A Simple Agreement for Future Equity lets startups raise early funding without immediately setting a company valuation. It's a popular investment tool in Austria's tech scene that gives investors the right to future shares when specific events occur, like a priced funding round or company sale.

Under Austrian corporate law, SAFEs work alongside traditional financing instruments and offer more flexibility than convertible notes. Investors provide capital now and automatically receive equity later, typically at a discount from the next qualified financing round. This helps young companies maintain cash flow while avoiding complex debt arrangements or immediate share pricing challenges.

Use a Simple Agreement for Future Equity when your startup needs quick capital but isn't ready to set a firm valuation. This works especially well for Austrian tech companies in their earliest stages, where traditional equity rounds might be premature or too expensive to structure.

The ideal timing is during seed-stage fundraising, particularly when dealing with angel investors or accelerators who understand startup dynamics. Under Austrian corporate law, SAFEs make most sense if you expect a larger financing round within 12-24 months and want to avoid the interest payments and maturity dates that come with convertible notes.

• Standard SAFE: The most common version in Austria's startup ecosystem, using a valuation cap without a discount rate.
• Valuation Cap + Discount: Combines both a maximum valuation and percentage discount on future rounds.
• Discount-Only SAFE: Offers a set percentage discount on the next funding round, popular with early-stage investors.
• MFN (Most Favored Nation): Automatically updates terms if better ones are offered to later investors.
• Post-Money SAFE: Calculates ownership based on post-money valuation, providing clearer dilution terms under Austrian law.

• Startup Founders: Lead the negotiation and execution of Simple Agreement for Future Equity agreements, typically seeking quick capital without immediate valuation.
• Angel Investors: Provide early-stage funding through SAFEs, often investing smaller amounts between €10,000 and €250,000.
• Corporate Lawyers: Draft and review agreements to ensure compliance with Austrian corporate law and protect both parties' interests.
• Accelerators: Use standardized SAFE agreements when investing in their portfolio companies.
• Company Board Members: Must approve SAFE issuance and oversee potential future conversion events.

• Company Details: Gather current capitalization table, corporate registration details, and existing investor agreements.
• Investment Terms: Define the investment amount, valuation cap, and any discount rate for future conversion.
• Trigger Events: Specify which events will trigger equity conversion under Austrian corporate law.
• Board Approval: Secure necessary internal authorizations before finalizing the SAFE.
• Documentation: Prepare company formation documents, financial statements, and cap table projections.
• Verification: Our platform ensures your SAFE includes all required elements and complies with Austrian regulations.

• Investment Amount: Clear statement of funds provided and payment terms under Austrian law.
• Conversion Terms: Detailed mechanics for converting to equity, including valuation cap and/or discount rate.
• Trigger Events: Specific circumstances that initiate automatic conversion into shares.
• Pre-Money Valuation: Formula for calculating company value before investment.
• Investor Rights: Information rights and any pro-rata investment rights in future rounds.
• Governing Law: Explicit reference to Austrian jurisdiction and applicable corporate regulations.
• Representations: Company's authority to issue SAFE and investor's sophistication.

Simple Agreement for Future Equity (SAFE) differs significantly from an Equity Agreement in several key aspects under Austrian law. While both involve company ownership, they serve distinct purposes and suit different situations.

• Timing of Ownership: SAFEs postpone equity distribution until a triggering event, while Equity Agreements transfer ownership immediately.
• Valuation Requirements: SAFEs don't need a current company valuation, making them ideal for early-stage startups. Equity Agreements require an agreed-upon valuation at signing.
• Legal Complexity: SAFEs are typically simpler documents with fewer requirements under Austrian corporate law. Equity Agreements involve more complex shareholder rights and obligations.
• Investor Rights: SAFEs provide limited rights until conversion, whereas Equity Agreements grant immediate shareholder privileges and voting rights.