The SAFE — the open standard for startup fundraising | Y Combinator

section]:mb-20">What is a SAFE<br>A SAFE (Simple Agreement for Future Equity) is a short contract an investor signs to fund your startup now in exchange for the right to shares of stock in your startup later. It converts into shares automatically when your startup raises a priced round.<br>Standard: The default instrument investors expect.<br>Simple: One short document, and usually the only term to negotiate is the valuation cap.<br>Clarity: The ownership you're selling is transparent and easy to calculate.<br>Proven: Thousands of startups, billions raised, over a decade of use.

What is "Send a SAFE"<br>"Send a SAFE" is the official tool by Y Combinator for sending SAFEs. It is the fastest way to generate, sign, and send a SAFE — in about two minutes.<br>By the creators: The SAFE was invented at YC. YC's SAFE is the original and most up-to-date instrument straight from the source, not a copy.<br>Free to send: Two minutes to generate, sign, and send a SAFE — for free.<br>Built for agents: The Send a SAFE tool is programmatic and agent-friendly. An AI agent can draft and send a SAFE on your behalf.<br>Industry Standard: The SAFE is the same instrument YC uses to fund its startups. Send one, and your startup's fundraise is already on the instrument that investors, and YC, trust.

Send a SAFE<br>How SAFEs work<br>Pick the fundraise amount. The valuation cap follows.<br>The biggest advantage of the post-money SAFE is that the amount of ownership sold is immediately transparent and calculable for both the founder and the investor. Start from how much you're targeting and how much ownership you're willing to sell — the valuation cap follows from the two.

Say you're targeting a $1M raise and 15% ownership sold. Your post-money valuation cap is $1M ÷ 15% = ~$6.7M, or "I'm targeting $1M at $6.7M post / $5.7M pre." Raise less on that cap and you sell less: $500k is ~7.5%, $800k is ~12%. You can also raise on more than one cap — $500k at a $5.5M cap (~9%) plus $500k at an $8.3M cap (~6%) gets you to the same ~15% sold.

Try the SAFE calculator<br>Run your own numbers in the SAFE calculator.<br>75%Founders

Try the SAFE Calculator<br>SAFE terms, defined<br>The handful of terms worth knowing before you raise on a SAFE.

Valuation capThe highest valuation at which a SAFE converts into shares. If your startup's priced round values the company above the valuation cap, the SAFE converts at the valuation cap — rewarding the investor for backing your company early. The ownership you sell equals the investment amount divided by the valuation cap.

DiscountA discount rewards early investors with a lower price than your startup's next priced round. Example: on a 20% discount SAFE, if you later raise a priced round, those SAFE investors get a discounted price of 20% less than what the new investors pay.

Post-money SAFEA post-money SAFE is a SAFE that has a valuation cap that is "post-money," meaning it's the valuation of your company after the investment is made (in other words, it includes the SAFE investment). The post-money SAFE has been the YC standard since 2018.

MFN (Most Favored Nation)An MFN SAFE has no valuation cap or discount; instead it automatically takes the valuation cap or discount of any SAFE you issue later, so an early investor can invest now without having to decide on these terms.

Pro rata rightsThe right, not the obligation, for an investor to invest money into your startup's future priced round to maintain their percentage ownership in your startup. The pro rata right lives in an optional, standardized side letter rather than in the SAFE itself.

ConversionA SAFE isn't shares in your startup until it converts into preferred stock, which happens automatically when you raise a priced round.

SAFE vs. Convertible Note vs. Priced Round<br>Not sure which instrument best fits your fundraise? See how the three compare on cost, speed, and control.<br>See a comparison<br>Download the forms<br>US companies<br>Three versions of the post-money SAFE for US companies, plus an optional side letter.<br>Safe: Valuation Cap, no Discount<br>Safe: Discount, no Valuation Cap<br>Safe: "Uncapped MFN" (no Valuation Cap, no Discount)<br>Pro Rata Side Letter<br>Safe User Guide

Non-US companies<br>Valuation Cap versions for companies formed in Canada, the Cayman Islands, and Singapore, each with an optional side letter. Consult a lawyer licensed in the relevant country before using these.<br>Safe: Valuation Cap, No Discount (Canada)<br>Pro Rata Side Letter (Canada)<br>Safe: Valuation Cap, No Discount (Caymans)<br>Pro Rata Side Letter (Caymans)<br>Safe: Valuation Cap, No Discount (Singapore)<br>Pro Rata Side Letter (Singapore)

New to SAFEs or want more information?<br>Read the SAFE User Guide for sample conversion math, an explanation of the pro rata side letter, and best practices.

Frequently Asked Questions<br>The SAFESend a SAFE<br>The instrument itself — what a SAFE is, how it converts, and the terms behind it.<br>What is a SAFE (Simple Agreement for Future Equity)?A...