A neutral-form Simple Agreement for Future Equity (SAFE) for an early-stage start-up, under which an individual investor provides money now in return for the right to shares in the future (typically on the next qualifying funding round or an exit). Governed by the law of England & Wales.
How to use this template, read this first - Replace every
[SQUARE-BRACKET]field before use. - A SAFE is not a loan (no interest, no fixed repayment date) and is not shares yet, it is a contractual right to convert the investment into equity on a future trigger, usually with a valuation cap and/or discount rewarding the early investor. - Important UK tax point: SAFEs originate in the US and may not qualify for SEIS/EIS tax relief, because those reliefs generally require shares to be issued at the time of investment. UK start-ups often use an Advance Subscription Agreement (ASA) instead, which can be structured to be SEIS/EIS-compatible. Take specialist tax advice before using a SAFE if SEIS/EIS matters to your investors. - Have a solicitor review before use.
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THIS SIMPLE AGREEMENT FOR FUTURE EQUITY is made on [DATE]
BETWEEN (1) [COMPANY NAME], a company registered in England & Wales (no. [NUMBER]) of [ADDRESS] (the "Company"); and (2) [INVESTOR NAME] of [ADDRESS] (the "Investor").
Agreed terms
1. Investment. The Investor will pay the Company £[AMOUNT] (the "Investment Amount") on or before [DATE].
2. Conversion into shares. The Investment Amount will convert into shares in the Company on the earliest of the following ("Conversion"):
- (a) a Qualifying Financing, the next equity fundraising in which the Company raises at least £[AMOUNT];
- (b) an Exit, a sale of the Company or its business, or a listing; or
- (c) the Longstop Date of [DATE], if neither has occurred.
3. Conversion terms. On a Qualifying Financing, the Investment Amount converts into the relevant class of shares at the lower of:
- the price per share implied by the Valuation Cap of £[AMOUNT]; and
- the price per share in the Qualifying Financing less a discount of [NUMBER]%.
On an Exit or at the Longstop Date, conversion is at the price implied by the Valuation Cap [or as otherwise set out here].
4. Shares and rights. The shares issued on Conversion will be [ordinary / the relevant financing class] shares, with the rights set out in the Company's articles as amended on Conversion.
5. No interest; ranking. No interest accrues on the Investment Amount. [State how the SAFE ranks on an insolvency before Conversion.]
6. Investor warranties. The Investor confirms it is [a sophisticated/high-net-worth investor or has taken its own advice], understands the high risk that it may lose its investment, and is not relying on the Company for investment advice.
7. Company warranties. The Company has the power to enter this Agreement and to issue the shares on Conversion.
8. Further documents. On Conversion the Investor will sign any subscription and shareholder documents reasonably required.
9. Governing law and jurisdiction. This Agreement is governed by the law of England and Wales, whose courts have exclusive jurisdiction.
Execution
Signed for [COMPANY]: __________________ Date: [DATE] Signed by [INVESTOR]: __________________ Date: [DATE]
--- This template is a starting point and not legal or tax advice. SAFEs have significant tax (SEIS/EIS) and structuring implications in the UK, have a qualified solicitor and tax adviser review and adapt it before use. Governing law: England & Wales.