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 Indiana, 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 SAFE is not a debt instrument, so it does not accrue interest and there are no set terms for repayment. Instead, it is an agreement that provides the investor with the right to future shares in the company, with the specific terms of the equity conversion determined during a subsequent funding round. The use of SAFEs is not specifically regulated by Indiana state statutes, but they are subject to general contract law principles and federal securities laws. Companies considering a SAFE should ensure that they comply with the Securities Act of 1933 and the Securities Exchange Act of 1934, including any applicable exemptions from registration requirements. It's important for both investors and founders to understand the terms of a SAFE and to consider whether it aligns with their interests and investment strategy. An attorney with experience in securities and startup financing can provide guidance on the appropriateness and structure of a SAFE for a particular company or investor.