Side Letter: SAFE Financing (Seed-Stage Startup)

The Side Letter: SAFE Financing (Seed-Stage Startup) template is a legal document that outlines the terms and conditions of a Simple Agreement for Future Equity (SAFE) financing agreement between an investor and a seed-stage startup company.

The template is designed to serve as an addendum to the main financing agreement, providing additional details and modifications specific to the SAFE financing arrangement. It covers a range of important clauses and provisions that govern the investment, including the purchase price, equity conversion rights, and potential scenarios such as acquisition or IPO.

This legal template aims to ensure clarity and understanding between the investor and the startup, formalizing their agreement and protecting their respective interests. It typically includes clauses related to the amount of investment, investment round, trigger events for equity conversion, valuation caps, and terms for investor rights, among others.

By using this Side Letter, both parties can agree on the essential terms of their SAFE financing arrangement, mitigating potential conflicts or misunderstandings in the future. It provides a valuable tool for seed-stage startups seeking external funding and investors looking to secure their investment in the company's growth.