Definition
A SAFE (Simple Agreement for Future Equity) lets an investor put in money now and receive shares later, typically at the next priced round, often with a cap or discount. It is not debt: there is usually no interest and no maturity date. It is a placeholder for ownership, not a loan.
In the room
How the word shows up in a real conversation.
An angel puts in ₹40 lakh on a post-money SAFE with a ₹8 crore cap. At the Series A, those rupees convert into shares as if the company were valued at the cap (or the discount, if that is better for the investor).
Common mistake
Treating a SAFE as “free money with no dilution.” Dilution arrives at conversion. Founders who skip the cap-table math are surprised later.
India note
Indian rounds more often use CCPS or convertible notes. Treat a US-style SAFE as a draft and have counsel map it to a local instrument.
See also
Convertible note
A short-term loan that converts into equity at a later priced round.
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Term sheet
A non-binding outline of the deal: price, ownership, and the rights that matter.
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Cap table
The ledger of who owns the company: shares, options, and what converts later.
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Post-Money Valuation
Company's valuation after receiving investment funding, including the new capital in the total value.
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