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 New York, 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 main advantage of a SAFE is that it is simpler and more cost-effective than traditional convertible notes, as it does not accrue interest or have a maturity date. However, it's important to note that SAFEs do not provide investors with immediate equity or guarantee 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, or sometimes a combination of both. While SAFEs are designed to be founder-friendly and maintain a balance of interests between investors and company owners, they may not be suitable for all situations. Companies considering using a SAFE should consult with an attorney to ensure that it aligns with their fundraising strategy and complies with applicable federal and state securities laws, including the New York State securities regulations.