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 Ohio, 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. SAFEs are used by startup companies during early-stage fundraising to raise capital without immediately issuing equity. Instead, the investment through a SAFE may convert into equity during a future equity financing round, such as a Series A round, often at a discounted rate or with a valuation cap. The terms of a SAFE should be carefully drafted to ensure they are fair and clear to both investors and company founders, and they must comply with both federal and state securities laws. This includes making necessary disclosures and filings with the Securities and Exchange Commission (SEC) and, if applicable, the Ohio Division of Securities. It's important for both investors and startups to consult with an attorney to understand the implications of a SAFE in their specific circumstances and to ensure compliance with all relevant legal requirements.