Document background
The Simple Agreement For Equity (SAFE) has become increasingly popular in the Canadian startup ecosystem as a straightforward investment instrument that bridges the gap between initial funding and formal equity rounds. This document is typically used when a company seeks early-stage investment but wants to defer valuation discussions until a later financing event. The agreement includes essential terms such as conversion mechanics, valuation caps or discounts, and investor rights, while ensuring compliance with Canadian securities regulations. It's particularly suitable for startups looking to raise capital quickly without the complexity and immediate dilution of a priced equity round, or the interest payments and maturity dates associated with convertible notes. The document addresses both federal and provincial regulatory requirements while maintaining the flexibility that makes SAFEs attractive to both companies and investors.
