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 Utah, as in other states, a SAFE (simple agreement for future equity) is not specifically regulated by state statutes but is governed by general principles of contract law and securities regulations. A SAFE is a financial instrument used by startups during early-stage fundraising to offer future equity to investors without immediately issuing shares. When a startup company uses a SAFE, the investor's money is converted into equity, typically during a later financing round, such as Series A, based on the terms agreed upon in the SAFE. The terms are designed to be fair to both investors and company founders, but it's important to note that SAFEs are not suitable for all situations. Founders and investors in Utah should consider the specific circumstances of the investment and the company's future prospects when deciding whether to use a SAFE. Additionally, federal securities laws and regulations by the Securities and Exchange Commission (SEC) apply to SAFEs, requiring compliance with rules regarding the offer and sale of securities. It is advisable for parties involved in a SAFE to consult with an attorney to ensure that the agreement complies with all applicable laws and regulations and to fully understand the rights and obligations created by such an agreement.