SAFE investment vehicle
At Esan Ventures, we prefer to use a SAFE investment vehicle to preserve the equity of early investors and founders.
A SAFE or safe stands for a “simple agreement for future equity”. It was created and published as a simple replacement for convertible notes. In practice, a SAFE enables a startup company and an investor to accomplish the same general goal as a convertible note, though a SAFE is not a debt instrument.
A SAFE is an agreement that can be used between a company and an investor. The investors invest money in the company using a SAFE. In exchange for the money, with a SAFE, the investor receives the right to purchase stock in a future equity round (when one occurs) subject to certain parameters set in advance in the SAFE.