A SAFE (simple agreement for future equity) is a standardized document used by startup companies for early-stage fundraising. A SAFE investment may convert to equity in the company in a future round of fundraising (Series A, for example) and does not give a SAFE investor a specific number of shares at the time of the investment. The price of shares owned by a SAFE investor are determined in the future round of fundraising.

The terms of a SAFE are intended to be balanced between the interests of the investors, and the founders or existing owners of the company, but a SAFE may not be appropriate for every early-stage company or investor.

The SAFE was created by Y Combinator, a well-known tech accelerator, in 2013.

In Arkansas, as in other states, a SAFE (simple agreement for future equity) is a financial instrument used by startups during early-stage fundraising. It is not a traditional debt instrument but rather a promise to issue equity to investors under certain triggering events, such as a future equity financing round, typically a Series A. The SAFE allows investors to convert their investment into equity at a later date, often with some favorable terms such as a discount rate or valuation cap. The terms of a SAFE are designed to be simple and to balance the interests of investors with those of the company's founders or current owners. However, it's important to note that while SAFEs are standardized, they are also flexible and can be modified to fit the specific needs of the company and the investors. Arkansas does not have specific state statutes governing SAFEs, so the general principles of contract law and federal securities laws would apply. Companies considering using a SAFE should consult with an attorney to ensure compliance with all relevant laws and that the SAFE is structured in the best interest of all parties involved.