Free SAFE Agreement Template (Simple Agreement for Future Equity)
A SAFE lets a startup raise money today and convert it into equity at the next priced round — no interest, no maturity date, no valuation negotiation. This free SAFE agreement template follows the Y Combinator post-money structure and shows investor ownership and founder dilution live.
What is a SAFE agreement?
A SAFE (Simple Agreement for Future Equity) is a contract in which an investor pays money now for the right to receive shares later, when the company raises a priced equity round. It is not debt: no interest, no maturity date, no repayment obligation.
Post-money vs pre-money SAFE
Use the post-money SAFE. Its valuation cap includes all outstanding SAFEs and notes, so investor ownership is fixed at signing: a $500,000 SAFE at a $10,000,000 post-money cap is exactly 5% of the company before the new round's dilution.
How SAFE dilution works
Investor ownership equals investment divided by the post-money valuation cap. If a discount also applies, conversion uses whichever of the cap price or the discounted round price is lower for the investor. Stack every outstanding SAFE before signing a new one.
SAFE vs convertible note
A convertible note is debt with interest and a maturity date; a SAFE has neither and simply sits on the cap table until a conversion event such as an equity financing, acquisition, or dissolution.
Frequently asked questions
Is a SAFE agreement legally binding?
Yes. A SAFE is binding once both parties sign and the investment is paid. Electronic signature is enforceable under the US ESIGN Act, the EU eIDAS Regulation, the UK Electronic Communications Act 2000, and the Indian IT Act 2000.
What is a typical valuation cap for a SAFE?
US pre-seed SAFEs commonly use post-money caps between $5M and $15M. The right cap keeps total pre-Series-A SAFE dilution under roughly 20–25% of the company.
Do I need both a valuation cap and a discount?
No. Many SAFEs use a cap only. When both are present, the investor converts at whichever gives the better price.
What happens if the company never raises again?
The SAFE stays outstanding. There is no maturity date and nothing is repayable; its liquidity and dissolution terms decide the outcome on an exit or wind-down.
Can non-US companies use a SAFE?
Yes, with local adaptation. SAFEs are used in the UK, Canada, Singapore, India, and the UAE, but conversion mechanics must fit local company and securities law.