SAFE (Simple Agreement for Future Equity)

A SAFE is a contract, created by Y Combinator, in which an investor pays now for the right to receive shares in a future priced round. It is not debt: there is no interest and no maturity date. The post-money SAFE, standard since 2018, fixes the investor's ownership as investment divided by the valuation cap, making dilution math clean for investors and pushing all SAFE dilution onto founders. It is the default instrument for most pre-seed and seed financings.