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 Montana (MT), 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 significant financing round like Series A. The SAFE is not a debt instrument, so it does not accrue interest or have a maturity date, and it does not provide investors with immediate equity or a promise of a specific number of shares. Instead, the number of shares and the price per share are determined during a future equity financing round, based on the terms set forth in the SAFE. The terms of a SAFE are designed to be fair to both investors and company founders, but it's important to note that SAFEs may not be suitable for all startups or investors. While the use of SAFEs is not regulated by specific Montana state statutes, companies and investors in Montana must comply with federal securities laws and regulations, including the Securities Act of 1933, when issuing or investing in SAFEs. These federal laws require proper disclosure of information to investors and, in some cases, limit the offering to accredited investors. Startups and investors in Montana should consult with an attorney to ensure compliance with all applicable securities laws and to understand the implications of using a SAFE in their particular situation.