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 Arizona, 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 contract that provides the investor with the right 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 designed to be simple and to balance the interests of both investors and company founders. 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 investors. The use of SAFEs is not regulated by specific Arizona statutes but is governed by general contract law and securities regulations. Companies considering using SAFEs should ensure compliance with federal securities laws and regulations, as well as any applicable state securities laws. Founders and investors in Arizona may benefit from consulting with an attorney to understand the implications of using SAFEs in their particular situation and to ensure that all legal requirements are met.