A SAFE (Simple Agreement for Future Equity) is a convertible instrument used primarily by early-stage startups to raise funding without setting an immediate valuation. The investor pays now; equity converts at the next priced round, typically at a discount or with a valuation cap.
There are two main variants: pre-money SAFE (original 2013 form) and post-money SAFE (revised 2018, now standard). The post-money SAFE clarifies what the investor owns immediately after conversion, which simplifies cap-table math.
SAFEs are simpler and cheaper to execute than convertible notes — no interest accrues, no maturity date, and the document is 5 pages instead of 20. Most US seed rounds today use post-money SAFEs.