SAFE Round
What is it?
- SAFE (Simple Agreement for Future Equity) round is identical to a convertible round, only differs in the form of instrument
- While convertible is a debt instrument, SAFE is like equity warrants.
- Widely used in angel and seed rounds, but also as a bridge round before a priced round.
What to expect?
- All the same things as a convertible round
- SAFE round is more founder friendly, as there is no maturity date or coupon.
- Unlike convertibles, SAFE instruments are not recognized in all jurisdictions, which can be an issue for some investors.
Who should consider
- Founders who want a simplified and less costly process of raising initial capital early on for their business.
- Useful for early-stage startups investing as there is usually inadequate data to determine the valuation of the company, allowing them to raise capital for growth before they can do so more accurately in the future.
How Can Bayfront Help
Strategy Review
Detailed analysis of the Client and advise on value-adding corporate strategies.
Competitive Benchmarking
Detailed analysis of the Client and benchmark them against Industry standards.
Structuring
Detailed analysis of the Client’s capital structure and advise on the optimal proportion of equity and debt.
Deal Execution Management
Assisting in execution of deal processes, most commonly in the form of capital raising.
Valuation
Helping to navigate through the complexities of transaction, improve transaction execution, and increase the chance of success.
Information Memorandum
For presenting to different target audience such as lenders, new sales relationships, new client relationships.
Governance Review
To determine the specific governance needs of a company and assist in areas which would minimize risks and help achieve business goals.
