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 Minnesota, 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. As a financial instrument used for early-stage fundraising, a SAFE allows investors to convert their investment into equity at a later financing round, typically at a discount to the price paid by later investors. The terms of a SAFE should be clear and comply with both federal securities laws and Minnesota's securities regulations. Founders and investors in Minnesota considering a SAFE should ensure that the agreement adheres to the Securities Act of 1933 and the Securities Exchange Act of 1934 at the federal level, as well as the Minnesota Securities Act, which requires proper registration or exemption for the offer and sale of securities. It is advisable for parties involved in a SAFE to consult with an attorney to navigate the complexities of securities law and to tailor the agreement to the specific needs of the company and the investors.