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 Pennsylvania (PA), 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 designed to be a simpler alternative to convertible notes, with fewer terms and no interest rate or maturity date. The terms of a SAFE are meant to be fair to both investors and company founders, but it's important to note that SAFEs are not suitable for all situations. Since SAFEs are a relatively new instrument and not specifically regulated, they are governed by general contract law and securities regulations. Companies using SAFEs must ensure compliance with federal securities laws and any relevant state securities regulations. In PA, this would include adhering to the Pennsylvania Securities Act of 1972, as amended, which governs the offer and sale of securities within the state. It's advisable for companies and investors in Pennsylvania to consult with an attorney to understand the implications of using SAFEs in their specific circumstances and to ensure that all transactions are conducted in accordance with applicable laws.