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 Iowa (IA), 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 law but were created by Y Combinator, and they are designed to be a simpler alternative to convertible notes, with fewer terms and no interest rates or maturity dates. While SAFEs are not regulated by specific statutes in Iowa, they are subject to general securities laws and regulations. Companies using SAFEs must ensure compliance with both federal securities laws and state securities regulations, which may include registering the SAFE with the Iowa Securities Bureau or qualifying for an exemption from registration. It's important for both investors and companies to understand that while SAFEs are intended to be founder-friendly and efficient, they are not suitable for all situations and should be used with a clear understanding of their potential risks and benefits. An attorney with experience in securities and startup financing can provide guidance specific to the company's situation and ensure compliance with applicable laws.