Fundraising · Financing

Is anyone using the new SAFE Financing Documents proposed by YC?

Derek Dukes Business Development, Startups at Amazon Web Services

January 26th, 2015

I just read the post on the YC blog. It's a compelling idea, and i've always thought convertible debt wasn't the best form for aligning early stage interests between labor and capital. Are any of you using this today? If you are how is it going? If you're not what have been the barriers to moving forward with it?

Here's the article for reference:
As a founder, you’re always in fundraising mode (whether active or passive). In this course, we’ll teach you how to successfully raise follow-on capital, establish a valuation for your company, build an investor pipeline for your next round, and more...

Kate Hiscox

January 26th, 2015

One of the biggest benefits of convertible debt is it allows you to continue to offer equity to new recruits. So its very compelling from a labor perspective and most investors get that. I'd involve a law firm though. I know there are those templates out there but we found we needed to adjust our agreements based on a variety of reasons (location, vesting schedule etc.). 

Grant Moller MBA | PMP | Certified AWS Architect | Entrepreneur

February 6th, 2015

I've also been looking into using the SAFE instrument.  I had a lawyer review it yesterday actually.  He said they have not been involved in a litigation yet, so there isn't precedent for how they hold up.  As they are written in the provided templates on YC, though, he didn't see any problems with them.