Once the terms have been agreed and the SAFE has been signed by both parties, the investor sends the agreed funds to the company. The company uses the funds in accordance with the applicable conditions. The investor only receives equity (safe preferred share) when an event mentioned in the SAFE agreement triggers the conversion. Outside of Y Combinator, SAFE is reviewed and used by startups in crowdinvesting markets. In 2020, the number of non-convertible bonds (e.g. B covered bonds and SISS) used by pre-financing undertakings is as high (58%) as the number of convertible bonds issued. Since companies get to know safe better in the beginning, this relatively young stock might have found its ideal niche in Title III offerings, also known as crowdinvesting for all investors. Y Combinator, a well-known technology accelerator, created the SAFE rating (simple agreement for future equity) in 2013 and uses it to fund most of the Seed phase startups participating in its three-month development meetings. Since 2005, Y Combinator has funded more than 1,000 startups, including Dropbox, Reddit, WePay, Airbnb, and Instacart. For a growing startup, the company is likely to raise more money. As a start-up investor, I`m not interested in just paying it back. The risk associated with a startup is high, so I hope that a high risk will be accompanied by a high upside potential.
In this context, I would like my SAFE to be subsequently « converted » into equity. As soon as someone decides to invest in the company during a « price cycle », my SAFE is converted into shares of the company. As a start-up, you undoubtedly go through agreements with other companies, suppliers, contractors, investors and many others. If you are a start-up and are looking for alternative and creative ways to find investors, contact Mohsen Parsa again today.