A SAFE, or Simple Agreement for Future Equity, is an investment contract used in early-stage financing that allows investors to convert their investment into equity at a later date, typically during a future financing round. This instrument is designed to simplify the investment process by eliminating the need for valuations, making it attractive for startups and investors alike. SAFEs often come with certain conditions such as valuation caps or discounts to reward early investors, which can significantly influence the terms of future equity conversions.
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