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 Kansas, as in other states, a SAFE (simple agreement for future equity) is a financial instrument used by startups during early-stage fundraising. It allows investors to convert their investment into equity at a later date, typically during a future equity financing round such as Series A. The SAFE is not a debt instrument, so it does not accrue interest or have a maturity date, and it does not provide investors with immediate equity or a promise of a specific number of shares. Instead, the number of shares and the price per share are determined during a subsequent financing round based on a valuation cap or discount rate specified in the SAFE. While the SAFE is designed to be a simpler and more founder-friendly alternative to convertible notes, it is important for both investors and founders to understand the terms and potential implications of using a SAFE in their fundraising efforts. Kansas does not have specific statutes governing SAFEs, so they are subject to general contract law and securities regulations. Founders and investors in Kansas considering a SAFE should consult with an attorney to ensure compliance with state and federal securities laws and to understand the full legal implications of the agreement.