Board Resolution (Simple Agreements for Future Equity) (SAFE)

Summary

This precedent is a written directors resolution for a corporation approving the issuance of Simple Agreements for Future Equity ("SAFEs") in the seed-stage financing of a start-up (also known as an emerging corporation or growth corporation). This precedent includes practical guidance and drafting notes. SAFEs are contracts developed by a United States start-up accelerator called Y Combinator. As the name implies, SAFEs are a contract that grants the investor a right to receive equity in the future upon the occurrence of certain predetermined events. Such predetermined events would typically include an equity investment from an established venture capital firm, a liquidation event (e.g., merger or acquisition ("M&A") or initial public offering ("IPO"), or the company's dissolution. SAFEs are advantageous because of the speed of negotiations, ease of execution, and brevity. They lack some of the complexity of other instruments and, as a result, can pose additional risks for the ...