BrokerDealer.com blog profiles a new investment document approach for Startups seeking capital from angel investors and others; courtesy of 2 April coverage by WSJ’s Adam Janofsky and Angus Loten “Startups Offer Unusual Reward for Investing; Simple Agreement for Future Equity aka “SAFE.”
When a young Boston entrepreneur sought half-a-million dollars to launch his startup last fall, he turned his back on today’s usual tactics, such as selling equity stakes or issuing convertible notes.
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Instead, Vinayak Ranade opted to use a largely untested way for entrepreneurs to raise funds known as a Simple Agreement for Future Equity.
The agreement provided investors in Drafted Inc., Mr. Ranade’s fledging, four-employee company, no equity shares, and the investors weren’t categorized as creditors. Continue reading