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 New Mexico (NM), 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. A SAFE is a financial instrument used by startups during early-stage fundraising, allowing investors to convert their investment into equity at a later financing round, typically at a discount. The terms of a SAFE should be clear, fair, and comply with both federal securities laws and New Mexico's securities regulations. Founders and investors in New Mexico considering a SAFE should ensure that the agreement complies with the New Mexico Securities Act, which requires proper disclosure of the investment terms and risks, and may require registration of the SAFE as a security unless an exemption applies. Additionally, federal regulations under the Securities and Exchange Commission (SEC) also apply, including rules regarding accredited investors and exemptions under Regulation D. It is advisable for parties involved in a SAFE to consult with an attorney to navigate the complexities of securities law and to ensure that the SAFE is structured appropriately for the company's and investors' interests.