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 Vermont, 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 terms of a SAFE are not standardized by Vermont state statutes, as they are private agreements between companies and investors. However, these agreements must comply with federal securities laws and regulations, which include requirements for proper disclosure and filing with the Securities and Exchange Commission (SEC) when applicable. Vermont does not have specific laws governing SAFEs, so the general principles of contract law and securities regulations would apply. Founders and investors in Vermont considering a SAFE should consult with an attorney to ensure that the agreement is fair, balanced, and complies with all relevant laws.