Although preferred stock or convertible notes are still the predominate choice for start-ups in seed and early-state financings, a relatively new financing instrument called a Simple Agreement for Future Equity (“SAFE”) has gained traction in the start-up ecosystem. A SAFE shares many characteristics with a convertible note, but is not technically a debt instrument. It is an investment contract that grants an investor the right to receive equity in the future following a “triggering event” (e.g., equity financing or sale of the company). Whether you are a start-up looking for financing, advising start-up clients during formation, or considering an investment
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