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Commercial Contracts

SAFE Discounts Should Be 50% At Least

The SAFE is like a warrant entitling investors to shares in the company, typically preferred stock, if and when there is a future liquidity event, i.e., if and when the company next raises “priced” equity capital, or is acquired, or files an IPO. Like convertible debt, SAFE deal terms can include valuation caps and share-price discounts, to give early (CF) investors a lower price per share than later (VC) investors or acquirers get for the same equity.


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