Post-money SAFE template (US, YC form) with founder annotations

POST-MONEY SAFE (Simple Agreement for Future Equity) Valuation Cap, no Discount variant, annotated for founders. THIS INSTRUMENT AND ANY SECURITIES ISSUABLE PURSUANT HERETO HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933... {{COMPANY_NAME}} SAFE (Simple Agreement for Future Equity) This Safe is one of the forms available at https://www.ycombinator.com/documents and the Company and the Investor agree this is the form used. THIS CERTIFIES THAT in exchange for the payment by {{INVESTOR_NAME}} (the "Investor") of ${{PURCHASE_AMOUNT}} (the "Purchase Amount") on or about {{EFFECTIVE_DATE}}, {{COMPANY_NAME}}, a {{STATE_OF_INCORPORATION}} corporation (the "Company"), issues to the Investor the right to certain shares of the Company's capital stock, subject to the terms described below. The "Post-Money Valuation Cap" is ${{VALUATION_CAP}}. [FOUNDER ANNOTATION — CAP] This is the number you negotiate hardest. Post-money cap = investor's max ownership at conversion is Purchase Amount / Cap. A ${{PURCHASE_AMOUNT}} check on a ${{VALUATION_CAP}} cap locks in that investor's stake regardless of how much more SAFE money you raise after. Every extra SAFE dilutes YOU, not them. If the round is growing, push the cap up with it. See Section 2 for certain additional defined terms. 1. Events (a) Equity Financing. If there is an Equity Financing before the termination of this Safe, on the initial closing of such Equity Financing, this Safe will automatically convert into the number of shares of Safe Preferred Stock equal to the Purchase Amount divided by the Conversion Price. The "Conversion Price" will be the lower of: (1) the Safe Price or (2) the Discount Price. [FOUNDER ANNOTATION — DISCOUNT] In the Valuation-Cap-only variant there is no Discount Price — strike it if the investor asks for both. In the Cap + Discount variant the market discount is 20%. Anything beyond 20% is outside market and you should push back. Never sign BOTH an aggressive cap AND a 25%+ discount without running the dilution math in a cap table tool first. (b) Liquidity Event. If there is a Liquidity Event before the termination of this Safe, the Investor will automatically receive from the Company a cash payment equal to the Purchase Amount OR a number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price, whichever the Investor elects. (c) Dissolution Event. If there is a Dissolution Event before this Safe terminates, the Company will pay an amount equal to the Purchase Amount, due and payable immediately prior to the Dissolution Event. 2. Definitions "Most Favored Nation Amendment Provision." If the Company issues any Subsequent Convertible Securities prior to the termination of this Safe, the Company will promptly provide the Investor with written notice thereof, together with a copy of all documentation relating to such Subsequent Convertible Securities. [FOUNDER ANNOTATION — MFN] MFN lets the investor retroactively swap in better terms if a later SAFE has them. It's standard in the Uncapped MFN variant and sometimes layered onto Valuation Cap SAFEs by early, small checks. Granting MFN on a priced cap SAFE is unusual and you can usually push back: "We're running a uniform round at one cap, so MFN isn't necessary here." If the investor insists, limit the MFN window (e.g., only applies to SAFEs closed within 90 days and only to economic terms, not governance). [FOUNDER ANNOTATION — PRO-RATA SIDE LETTER] Pro-rata is NOT in the standard YC post-money SAFE. It comes as a separate side letter. Sign this ONLY for investors who are writing lead-sized checks ({{PRO_RATA_THRESHOLD}} or more) or who bring real strategic value. Signing pro-rata side letters for every $25k angel creates a cap-table mess at your Series A — the lead will ask you to clean it up and some of your angels will feel burned. Use the threshold. Say no politely to the rest. 5. Miscellaneous (a) Any provision of this Safe may be amended, waived or modified by written consent of the Company and either (i) the Investor or (ii) the majority-in-interest of all then-outstanding Safes with the same "Post-Money Valuation Cap"... IN WITNESS WHEREOF, the undersigned have caused this Safe to be duly executed and delivered. COMPANY: {{COMPANY_NAME}} By: ______________________ Name: {{FOUNDER_NAME}} Title: {{FOUNDER_TITLE}} Date: {{EFFECTIVE_DATE}} INVESTOR: {{INVESTOR_NAME}} By: ______________________ Date: {{EFFECTIVE_DATE}}