Everything you need to know about the SAFETI instrument, conversion options, and how it works for founders and investors.
SAFETI stands for Simple Agreement for Future Equity, Token or Interest. It is a single investment instrument that gives the investor three conversion options at the Interest Event Date: convert into debt with a multiple rate return (Interest), convert into company tokens (Token), or convert into equity (Equity). This flexibility allows both founders and investors to defer the conversion decision until a future date.
A standard SAFE (Simple Agreement for Future Equity) only converts into equity upon a priced round. A SAFETI extends this concept by offering three conversion paths — equity, token, or interest — all within a single instrument. The investor selects their preferred conversion at the Interest Event Date, providing more flexibility than a traditional SAFE.
Yes. Creating and downloading your SAFETI document is completely free. The generated document is a Word file (.docx) that you can edit, review with legal counsel, and use for your fundraising.
No. SAFETI is a document generation tool, not a law firm. The generated document is provided for informational purposes only and does not constitute legal advice. Both parties should consult with qualified legal counsel before executing any agreement.
SAFETI is built by UNOCU Inc, a Delaware corporation focused on building tools for startup fundraising.
At the Interest Event Date, the investor can select one of the following:
Yes. The Investor can elect to reject the Interest Event and send written notice to the Company at least 4 weeks prior to the Interest Event Date to change their conversion to either Token Financing (subject to the non-US restriction) or Equity Financing, with the consent of the Company board. The Investor is also allowed to voluntarily convert into equity in the event of no equity financing or token financing.
The Token conversion option is only available to non-US investors and entities. This is consistent with the Initial Token Offering restrictions defined in the instrument. Any initial token offering will not be conducted or involve the Company’s US-based affiliates.
The Purchase Amount is the total amount the Investor pays to the Company in exchange for the rights under the SAFETI instrument. This is the investment amount entered when generating the document.
The Multiple Rate is the return multiplier applied to the investment amount. For example, a 1.5x Multiple Rate on a $100,000 investment would mean $150,000 in Returned Capital. The Multiple Rate applies if the SAFETI is subscribed prior to the Close Date.
The Interest Event Date is the date by which the next equity round or financing event must occur. At this date, the investor selects their conversion option (Interest, Token, or Equity). If the Company fails to complete a financing event by this date, it must immediately repay the Purchase Amount plus 10% per annum interest.
The Interest Rate is the annual interest rate applied to the Purchase Amount. This accrues from the date of investment and is payable in addition to the Purchase Amount at the Interest Event or if the Company fails to complete a financing event on time.
The Returned Capital is the total amount returned to the investor, calculated as the Multiple Rate multiplied by the Purchase Amount. For example, if the Multiple Rate is 2x and the Purchase Amount is $50,000, the Returned Capital is $100,000.
The Close Date is the deadline by which the subscription and confirmation of payment of the SAFETI must occur. The Multiple Rate applies to investments subscribed before this date.
If there is an Equity Financing Event before the SAFETI expires, the Company will automatically issue to the Investor a debt repayment of the purchase amount plus the Interest Rate within 30 days of the conclusion of the equity financing event. The instrument then expires and terminates.
In a Liquidity Event (Change of Control or IPO), the Investor can either: (i) receive a cash payment equal to the Returned Capital, or (ii) receive shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price. If there are not enough funds to pay all SAFETI holders in full, available funds are distributed pro rata among all holders in proportion to their Purchase Amounts.
In a Dissolution Event (voluntary termination, general assignment for creditors, or winding up of the Company), the Company must pay the Investor an amount equal to the Purchase Amount, prior and in preference to any distribution to holders of capital stock. If assets are insufficient, they are distributed pro rata among all SAFETI holders.
If the Company fails to complete the financing event on or before the Interest Event Date, the Company must immediately pay the Investor the Purchase Amount with an interest rate of 10% per annum accrued from the date of investment. This provides downside protection for the investor.
The SAFETI expires and terminates upon: (i) the issuance of stock or payment to the Investor pursuant to an Equity Financing or Liquidity Event; (ii) the payment of amounts due pursuant to a Dissolution Event or Interest Event; or (iii) the conversion of the SAFETI into tokens pursuant to the Investor Conversion Terms.
No. The Investor is not entitled, as a holder of the SAFETI instrument, to vote or receive dividends or be deemed the holder of the Company’s capital stock for any purpose, until shares have been issued upon conversion.
Yes. The instrument requires the Investor to represent that they are an accredited investor as defined in Rule 501 of Regulation D under the Securities Act. The Investor must also represent they are purchasing for investment purposes, not for resale.
Neither party can assign the instrument without the other’s written consent, with two exceptions: the Investor may assign to affiliated entities (general partners, managing members, related venture funds), and the Company may assign in connection with a reincorporation to change domicile.
The Pro Rata Rights Agreement gives the Investor the right to purchase their proportional share of future private placements of securities by the Company occurring after the Equity Financing, subject to customary exceptions. This helps the investor maintain their ownership percentage.
All rights and obligations under a SAFETI agreement are governed by the laws of the State of Delaware, without regard to the conflicts of law provisions of such jurisdiction.
No. The SAFETI instrument and any securities issuable pursuant thereto have not been registered under the Securities Act of 1933, as amended, or under the securities laws of certain states. These securities may not be offered, sold or otherwise transferred except as permitted under applicable securities laws pursuant to an effective registration statement or an exemption therefrom.
Yes. Any provision of the instrument may be amended, waived or modified, but only upon the written consent of both the Company and the Investor.
If any provision is held to be invalid, illegal, or unenforceable, that provision alone will be deemed null and void. The remaining provisions of the instrument will remain operative and in full force and effect.
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