Simple Agreement for Future Equity

A Simple Agreement for Future Equity (SAFE) is a quick, standardised way for an early investor to put money into a startup now in exchange for shares later, usually at the next funding round. It delays the hard question of what the company is worth today, which is difficult to answer very early on.

It is like paying now for a coffee card that will be turned into actual cups later once the price is set. A Simple Agreement for Future Equity matters because it lets young companies raise small amounts fast and cheaply, though founders should track how much future ownership they are promising away.