������Ƶ

A Simple Agreement for Future Equity (SAFE) lets startups raise money from investors now while postponing the actual share price calculation until later. Under German investment law, it works like a convertible note but without debt or interest - investors give you cash today in exchange for the right to get shares in your company during the next financing round.

This funding tool has gained popularity among German tech startups because it's faster and simpler than traditional investment agreements. Instead of complex negotiations about current company value, both sides agree on a discount rate or valuation cap that will apply when converting the investment into equity. The German Federal Financial Supervisory Authority (BaFin) classifies SAFEs as investment products requiring careful documentation.

Consider a Simple Agreement for Future Equity when your German startup needs quick capital but you're not ready to set a firm company valuation. This tool works especially well during early funding rounds when your business model is still evolving and traditional equity negotiations would be premature or too expensive.

SAFEs make particular sense for tech startups in Germany's innovation hubs like Berlin or Munich, where you need flexibility to adapt your business model. They're ideal when you have interested investors but want to avoid the complexity and costs of full equity rounds or traditional convertible notes. Just ensure your SAFE complies with BaFin regulations and includes clear conversion terms for future funding events.

• Valuation Cap SAFE: Sets a maximum price for converting the investment into shares, protecting investors if the company value skyrockets
• Discount SAFE: Offers investors a percentage discount on shares during the next funding round, typically 10-30% below what new investors pay
• MFN (Most Favored Nation) SAFE: Automatically gives investors the best terms offered to any other SAFE investor
• Basic SAFE: Simple version with standard conversion terms, popular among German early-stage startups for its straightforwardness
• Hybrid SAFE: Combines a valuation cap with a discount rate, common in Berlin's tech scene for balancing investor and founder interests

• Startup Founders: Create and propose SAFEs to raise early capital without immediately diluting their ownership or setting a firm valuation
• Angel Investors: Use SAFEs to invest in promising German startups while securing future equity rights at potentially advantageous terms
• Legal Counsel: Draft and review SAFE agreements to ensure compliance with BaFin regulations and protect both parties' interests
• Investment Firms: Deploy SAFEs as part of their early-stage investment strategy in German tech ecosystem
• Business Accelerators: Offer standardized SAFE templates to their portfolio companies for efficient fundraising

• Company Details: Gather complete legal registration info, shareholder structure, and previous funding rounds documentation
• Investment Terms: Define the investment amount, valuation cap or discount rate, and specific conversion triggers
• Investor Information: Collect investor's legal identity, investment vehicle details, and BaFin-required verification documents
• Future Rights: Specify participation rights in future rounds, information rights, and any pro-rata investment options
• Compliance Check: Ensure alignment with German securities laws and BaFin requirements for investment instruments
• Document Generation: Use our platform to create a legally sound SAFE that includes all required elements and minimizes drafting errors

• Party Details: Full legal names, addresses, and registration numbers of the startup and investor
• Investment Terms: Precise investment amount, valuation cap or discount rate, and payment conditions
• Conversion Mechanics: Clear triggers for equity conversion, calculation method, and share class specifications
• Rights Description: Detailed investor rights, including information access and participation in future rounds
• Termination Clauses: Conditions for agreement dissolution and procedures for non-conversion scenarios
• BaFin Compliance: Mandatory risk disclosures and investor protection provisions under German securities law
• Governing Law: Explicit statement of German law application and jurisdiction for disputes

A Simple Agreement for Future Equity (SAFE) differs significantly from an Equity Agreement. While both deal with company ownership, they serve distinct purposes in the German startup ecosystem.

• Timing of Valuation: SAFEs postpone company valuation until a future funding round, while Equity Agreements require immediate valuation and share price determination
• Legal Complexity: SAFEs offer streamlined documentation with fewer negotiation points, whereas Equity Agreements involve detailed shareholder rights and governance provisions
• Investment Structure: SAFEs represent a promise of future shares without immediate equity rights, while Equity Agreements transfer actual ownership immediately
• Regulatory Requirements: SAFEs face lighter BaFin oversight as investment instruments, but Equity Agreements must comply with full German corporate law requirements for share transfers
• Cost and Speed: SAFEs typically cost less and close faster, making them ideal for early-stage fundraising where traditional equity rounds would be impractical