Narrative. The Simple Agreement for Future Equity (“SAFE”) was introduced by Y Combinator in 2013 and materially revised in September 2018 to the “post-money” form. The post-money SAFE was the industry’s response to a problem with the original “pre-money” SAFE: when multiple SAFEs stacked on top of each other, founders could not predict their dilution, and the math at conversion was surprisingly brutal. The post-money SAFE fixes this by calculating the cap on a post-money basis — meaning the investor’s percentage ownership is fixed at signing (subject to downstream dilution from new money only). The tradeoff is that the post-money form is more dilutive to founders than the pre-money form, dollar-for-dollar. Big-law practice treats the YC post-money SAFE as a public, unmodified standard — investors typically accept it only in its published form, with changes confined to the cap, discount, MFN, and pro-rata side letters. Because YC publishes the form under a Creative Commons license, it is legally safe to use and adapt. This form re-presents the core mechanics in plain language with the canonical structure; for any live deal, use the official YC form from https://www.ycombinator.com/documents directly.

THIS CERTIFIES THAT in exchange for the payment by [INVESTOR NAME] (the “Investor”) of $[PURCHASE AMOUNT] (the “Purchase Amount”) on or about [DATE], [COMPANY NAME], Inc., a Delaware corporation (the “Company”), issues to the Investor the right to certain shares of the Company’s Capital Stock, subject to the terms described below.

1. Events

1.1 Equity Financing

If there is an Equity Financing before the termination of this SAFE, on the initial closing of such Equity Financing, this SAFE will automatically convert into the greater of: (a) the number of shares of Standard Preferred Stock equal to the Purchase Amount divided by the Standard Preferred Price; or (b) the number of shares of Safe Preferred Stock equal to the Purchase Amount divided by the Safe Price.

1.2 Liquidity Event

If there is a Liquidity Event before the termination of this SAFE, the Investor will, at the Investor’s option, either (a) receive a cash payment equal to the Purchase Amount, or (b) automatically receive the number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price.

1.3 Dissolution Event

If there is a Dissolution Event before this SAFE terminates, the Company will pay an amount equal to the Purchase Amount to the Investor, to the extent available, after satisfaction of outstanding indebtedness and creditor claims and alongside other SAFE holders and holders of preferred stock.

1.4 Termination

This SAFE will automatically terminate (without any liability to the Company) upon the earliest of (a) the issuance of Capital Stock to the Investor pursuant to Section 1.1 or 1.2, (b) the payment (or setting aside for payment) of amounts due the Investor pursuant to Section 1.2 or 1.3.

2. Definitions

Drafting note. The post-money SAFE relies on a handful of carefully interlocked definitions. The most important are reproduced here with the canonical YC semantics; in any real use, cross-check against the current YC published form.

– Capital Stock means the capital stock of the Company, including Common Stock and Preferred Stock. – Company Capitalization calculated as of immediately prior to the Equity Financing, includes all shares of Capital Stock issued and outstanding on a fully-diluted basis, all Converting Securities, and all shares reserved under any equity incentive or similar plan (including any increase in the pool contemplated as part of the Equity Financing). – Discount Rate is [100% − discount, e.g., 80%]. – Dissolution Event means a voluntary termination of operations, a general assignment for the benefit of creditors, or any other liquidation, dissolution, or winding up of the Company (excluding a Liquidity Event). – Equity Financing means a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells Preferred Stock at a fixed pre-money or post-money valuation. – Liquidity Capitalization is calculated as of immediately prior to the Liquidity Event, including all shares of Capital Stock outstanding plus all shares issuable upon exercise or conversion of outstanding securities, excluding the Safes. – Liquidity Event means a Change of Control, a Direct Listing, or an Initial Public Offering. – Liquidity Price means the price per share equal to the Post-Money Valuation Cap divided by the Liquidity Capitalization. – Post-Money Valuation Cap is $[VALUATION CAP]. – Safe Price means the price per share equal to the Post-Money Valuation Cap divided by the Company Capitalization. – Standard Preferred Price means the lowest price per share of the Standard Preferred Stock. – Standard Preferred Stock means the shares of Preferred Stock issued to investors in the Equity Financing. – Safe Preferred Stock means shares of a series of Preferred Stock issued to the Investor in the Equity Financing, having the same rights, privileges, and preferences as the Standard Preferred Stock, other than with respect to: (a) the per-share liquidation preference, conversion price, and any dividend rate (which shall be based on the Safe Price).

3. Company Representations

The Company represents and warrants that: (a) it is duly incorporated, validly existing, and in good standing under the laws of Delaware; (b) the execution, delivery, and performance of this SAFE has been duly authorized; (c) this SAFE constitutes a legal, valid, and binding obligation of the Company; (d) the issuance of the SAFE and of any Capital Stock issuable upon conversion will not be in violation of applicable securities laws; and (e) all consents required from any third party have been obtained.

4. Investor Representations

The Investor represents and warrants that: (a) the Investor has full legal capacity to execute and deliver this SAFE; (b) the Investor is an “accredited investor” within the meaning of Rule 501 of Regulation D; (c) the Investor is purchasing this SAFE for the Investor’s own account for investment, not with a view to distribution; and (d) the Investor understands that this SAFE is a highly speculative investment and may result in the total loss of the Purchase Amount.

5. Miscellaneous

Any provision of this SAFE may be amended, waived, or modified only upon the written consent of the Company and the Investor. Neither this SAFE nor any rights hereunder may be assigned by the Investor without the Company’s prior written consent, except to an affiliate of the Investor. This SAFE is governed by the laws of the State of [Delaware / California]. The parties agree that the Investor is an investor in the Company and is not a creditor.

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IN WITNESS WHEREOF, the undersigned have caused this SAFE to be duly executed as of the date first written above.

COMPANY: [COMPANY NAME], Inc. INVESTOR:

By: _________________________ By: _________________________ Name: Name: Title: Title:

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This form is provided for informational purposes only and does not constitute legal advice or create an attorney-client relationship. Every situation is different; consult qualified legal counsel before using or adapting this document. © Montague Law.