Free Y Combinator Post-Money SAFE (Valuation Cap) Template

THIS INSTRUMENT AND ANY SECURITIES ISSUABLE PURSUANT HERETO HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

POST-MONEY SIMPLE AGREEMENT FOR FUTURE EQUITY (SAFE)

(Valuation Cap)

This Simple Agreement for Future Equity (the "Safe") is entered into on [DATE], by and between [COMPANY_NAME], a [STATE_OF_INCORPORATION] corporation (the "Company"), and [INVESTOR_NAME] (the "Investor").

In exchange for the payment by the Investor of $[PURCHASE_AMOUNT] (the "Purchase Amount") on or about [DATE], the Company hereby issues to the Investor the right to certain shares of the Company's capital stock, subject to the terms set forth below.

Post-Money Valuation Cap: $[VALUATION_CAP]

Discount Rate: [DISCOUNT_RATE_PERCENT]%

1. EVENTS

(a) Equity Financing. If there is an Equity Financing before the termination of this Safe, on the initial closing of such Equity Financing, this Safe will automatically convert into the greater of: (1) the number of shares of Standard Preferred Stock sold in the Equity Financing equal to the Purchase Amount divided by the price per share of the Standard Preferred Stock; or (2) the number of shares of Safe Preferred Stock equal to the Purchase Amount divided by the Safe Price (defined as the Valuation Cap divided by Company Capitalization).

(b) Liquidity Event. If there is a Liquidity Event before the termination of this Safe, the Investor will, at its option, either (i) receive a cash payment equal to the Purchase Amount or (ii) receive from the Company a number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price.

(c) Dissolution Event. If there is a Dissolution Event before the termination of this Safe, the Investor will be entitled to receive a cash payment equal to the Purchase Amount, operating senior to Common Stock and pari passu with other Safes.

(d) Termination. This Safe will terminate upon either (i) the issuance of capital stock to the Investor pursuant to Section 1(a) or Section 1(b); or (ii) the payment of amounts due to the Investor pursuant to Section 1(b) or Section 1(c).

2. DEFINITIONS

"Company Capitalization" means the sum of all shares of Capital Stock issued and outstanding, all converting securities, all promised or granted options, and the unallocated option pool.

3. COMPANY REPRESENTATIONS

(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of [STATE_OF_INCORPORATION].

(b) The execution, delivery and performance by the Company of this Safe is within the corporate powers of the Company and has been duly authorized by all necessary corporate actions.

4. INVESTOR REPRESENTATIONS

(a) The Investor is an accredited investor as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

(b) The Investor has full power and authority to enter into this Safe.

5. MISCELLANEOUS

This Safe shall be governed by and construed in accordance with the laws of the State of [GOVERNING_STATE], without regard to conflict of laws principles.

IN WITNESS WHEREOF, the parties have executed this Safe as of [DATE].

[COMPANY_NAME]

By: _______________________________

Name: [SIGNER_NAME]

Title: [SIGNER_TITLE]

[INVESTOR_NAME]

By: _______________________________

Name: [INVESTOR_SIGNER_NAME]

Address: [INVESTOR_ADDRESS]