BrokerDealer Profile: StartUps Embrace “SAFE” Approach For Investors

Vinayak Ranade, the founder of Drafted. Photo: M. Scott Brauer for The Wall Street Journal 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. global database can link you to angel investors and qualified brokerdealers

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