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A Simple Agreement for Future Equity (SAFE) is a startup funding tool that gives investors the right to receive future equity without immediately becoming shareholders. It's becoming increasingly popular among Filipino startups as a faster, simpler alternative to convertible notes, especially under the Securities and Exchange Commission's guidelines for early-stage investments.

The SAFE converts to actual shares when specific trigger events occur, like a priced funding round or company sale. For Philippine startups, it offers key advantages: no debt obligations, no maturity date, and minimal paperwork compared to traditional financing methods. The agreement typically includes valuation caps and discount rates to protect both founders and investors.

Consider a Simple Agreement for Future Equity when your Philippine startup needs quick capital without the complexity of traditional equity rounds or debt financing. This works especially well for early-stage companies that have promising growth potential but find it challenging to set a firm valuation right now.

SAFEs make sense during initial seed rounds, particularly when dealing with angel investors or local venture capital firms who understand startup dynamics. The agreement proves valuable when you need flexibility on valuation timing, want to avoid monthly interest payments, and prefer simpler paperwork than convertible notes require. Just ensure compliance with SEC guidelines on startup fundraising and investor protection rules.

• Simple Agreement for Future Equity variations in the Philippines typically come in four main forms: valuation cap only, discount only, cap and discount, and most-favored nation (MFN). The valuation cap version sets a maximum company value for conversion, while discount versions offer a percentage off future rounds.
• Cap-and-discount SAFEs combine both features, giving investors the better deal at conversion. MFN SAFEs automatically match the best terms given to other investors. Each type balances investor protection with startup flexibility under SEC guidelines.

• Startup Founders: Draft and offer SAFEs to raise capital while maintaining control and avoiding immediate equity dilution. They handle negotiations and ensure SEC compliance.
• Angel Investors: Provide early-stage funding through SAFEs, often contributing between ₱500,000 to ₱5 million per investment while accepting future equity terms.
• Legal Counsel: Review and customize SAFE agreements to protect both parties' interests and ensure alignment with Philippine securities laws.
• Venture Capital Firms: Use SAFEs for rapid deployment of seed capital across multiple startups, particularly in tech and innovation sectors.

• Company Details: Gather your startup's incorporation papers, SEC registration, and latest capitalization table.
• Investment Terms: Decide on valuation cap, discount rate, and conversion triggers that align with your fundraising strategy.
• Investor Information: Collect complete details about the investor, including proof of identity and investment capacity under Philippine securities laws.
• Financial Projections: Prepare realistic growth forecasts and funding milestones that justify your valuation assumptions.
• Documentation: Use our platform to generate a legally-sound SAFE agreement, ensuring all required elements meet SEC guidelines.

• Investment Amount: Clearly state the purchase amount and payment terms in Philippine Peso
• Conversion Terms: Define qualifying financing events, valuation cap, and discount rate percentages
• Company Information: Include complete legal name, SEC registration details, and authorized representatives
• Investor Rights: Specify information rights, pro-rata rights, and any participation in future rounds
• Exit Provisions: Detail conversion mechanics for acquisition, IPO, or dissolution events
• Governing Law: State Philippine jurisdiction and compliance with SEC regulations
• Representations: Include company and investor warranties under Philippine securities laws

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

• Timing of Ownership: SAFEs only grant future equity rights when specific events occur, while Equity Agreements immediately transfer ownership shares.
• Valuation Requirements: SAFEs don't need an immediate company valuation, making them ideal for early-stage startups. Equity Agreements require a defined current valuation.
• Legal Complexity: SAFEs use simpler documentation and fewer SEC filing requirements compared to formal Equity Agreements, which need detailed shareholder rights and corporate governance provisions.
• Investor Rights: SAFE holders typically have limited rights until conversion, while Equity Agreement shareholders immediately gain voting and dividend rights.