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Safe Agreement Pdf

The new vault doesn`t change two fundamental features that we believe remain important for startups: as a flexible single-document security with no many conditions to negotiate, startups and investors save money on attorney fees and reduce the time spent negotiating investment terms. Startups and investors usually have only one point to negotiate: the valuation cap. Since a vault does not have an expiry or maturity date, no time or money should be spent on renewing maturity dates, revising interest rates or other. While the vault may not be suitable for all funding situations, the conditions must be balanced, taking into account both the interests of the startup and investors. As with the original vault, there are still trade-offs between simplicity and completeness, so not all marginal cases are addressed, but we think the vault covers the most relevant and common issues. Both parties are encouraged to have their lawyers check the vault if they wish, but we believe it offers a starting point that can be used in most situations without change. We stick to this belief because we have seen hundreds of companies first-hand every year and helped them raise funds, as well as based on the thoughtful feedback we received from founders, investors, lawyers and accountants with whom we shared the first designs of the post-money vault. There are four versions of the new post-money safe as well as an optional page letter. Whether you are using the safe for the first time or already have safes, we advise you to read our Safe User Guide (a substitute for the original Safe Primer). The Safe User Guide explains how the vault is converted, with sample calculations as well as other details about the proportional secondary letter, explanations of other technical changes to the new vault (e.g.B. Language for tax treatment) and suggestions for the best use.

Our updated safes are therefore post-money safes. By “post-money” we take the measure of the ownership of safe holders after (post) all the safe money has been charged – which is now its own turn – but always before (before) the new money in the price cycle that transforms and dilutes the safes (usually the A series, but sometimes Series Seed). Post-money-safe has what we consider to be a great advantage for founders and investors – the ability to immediately and accurately calculate the amount of ownership of the company sold. For founders, it`s essential to understand the dilution of each vault they sell, just as it`s fair for investors to know how many properties they`ve bought. Another innovation of the safe concerns a “proportional” right. The initial vault required the company to allow safe holders to participate in the funding cycle after the funding cycle into which the vault was transformed (for example. B if the safe were converted into series A preferred share financing, a safe holder – now holding a sub-series of Series A preferred shares – would be allowed to acquire a proportionate share of the Series B preferred shares. .

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