Safe Valuation Cap And Discount

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Cap or a Discount? Why it Matters — Joyance Partners

(12 days ago) Apr 07, 2018 · Cap and discount in a Note or SAFE are discreet alternatives to one another. The cap value never changes. The discount only applies when the cap value isn’t reached. The less charitable view is that the elimination of the discount in Notes/SAFEs is a cynical power grab, pure and simple. It derives from a belief that early rounds in hot ...

https://www.joyancepartners.com/blog/2018/4/7/cap-or-a-discount-why-it-matters

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SAFE Notes: Everything You Need to Know

(12 days ago) Jun 19, 2020 · A valuation cap sets the highest price that can be used to set the conversion price. At the time of conversion, the investor can take advantage of either the discount or the valuation cap — whichever is more favorable. SAFEs can include a discount, a valuation cap, both, or neither.

https://www.upcounsel.com/safe-notes

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What is a SAFE Financing? | WyrickRobbins

(11 days ago) Aug 29, 2018 · A SAFE can have either a conversion discount or a valuation cap, or both a conversion discount and a valuation cap! [4] The liquidation preference is the amount the preferred stock receives first before any assets are divvied up amongst the other stockholders in a liquidation event, unless they convert into common stock.

https://www.wyrick.com/news-insights/what-is-a-safe-financing

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Valuation Caps and Conversion Discounts - IPOhub

(10 days ago) Scenario 3: No Valuation Cap, 20% Conversion Discount. Consider the same situation as Scenarios 1 and 2, but the convertible debt agreement includes a 20% conversion discount instead of a valuation cap. Rather than converting at $1 per share, as in Scenario 1, the angel investor can convert her shares at $0.80 per share ($1 x (1-20%)).

https://www.ipohub.org/valuation-caps-and-conversion-discounts/

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Typical SAFE valuation cap & discount? : startups

(11 days ago) level 1. russianhillz. · 10m. Discount of 20% is fairly standard unless you have a reason to depart. Cap should be based on your value of the company, not a multiple of what they invest. If you set cap at 3x investment amount, then you've sold 33% of your company.

https://www.reddit.com/r/startups/comments/i9od61/typical_safe_valuation_cap_discount/

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Numerical Example: SAFE, cap and discount | FundersClub

(9 days ago) Investor has purchased a safe for $100,000. The Valuation Cap is $8,000,000 and the Discount Rate is 85%. The company has negotiated with investors to sell $1,000,000 worth of Series A Preferred Stock at a $10,000,000 pre-money valuation. The company’s fully-diluted outstanding capital stock immediately prior to the financing, including a 1,000,000 share option pool to be adopted in ...

https://fundersclub.com/learn/safe-primer/safe-numerical-examples/safe-cap-and-discount/

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Gun Safes & Rifle Safes for Sale | Dean Safe– Dean Safe

(13 days ago) Dean Safe stocks the best gun safes with secure burglary ratings and quality fire protection. Shop from biometric gun safes, electronic rifle safes and mechanical firearm safes. Free Shipping and Lifetime Warranty! Locations Services Help. CALL OUR SAFE EXPERTS AT 800-827-7534. Login. 0 Cart GUN SAFES. SAFES. BRANDS.

https://www.deansafe.com/collections/gun-safe-and-rifle-safes

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How does the discount and cap work on a SAFE note? - …

(12 days ago) The question asks about two different scenarios: $4 million valuation cap, and 25% discount on an original YC Safe [original version was pre-money conversion], but my focus is on the interrelation between the valuation cap and discount because thi...

https://www.quora.com/How-does-the-discount-and-cap-work-on-a-SAFE-note

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Reading: Simple Agreement For Equity (SAFE): Valuation Cap ...

(10 days ago) In the case of a Liquidation, the conversion of the SAFE is the same as a Standard SAFE with a Valuation Cap and NO Discount Rate. Example 1a: An investor has bought a SAFE for $ 300'000. The Valuation Cap is 4 million and the Discount Rate is 70%. There are currently 2 million shares of common stock outstanding.

https://vlp.teju-finance.com/courses/mod/book/view.php?id=189&chapterid=563

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What is a valuation cap in the context of a SAFE note? - …

(11 days ago) The valuation cap in a SAFE is generally the same as the valuation cap in any other convertible security. The valuation cap sets the maximum valuation at which the SAFE will convert into equity. Here is an example of how a valuation cap works: Let...

https://www.quora.com/What-is-a-valuation-cap-in-the-context-of-a-SAFE-note

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SAFE Calculator for the Y-Combinator Post Money SAFE

(13 days ago) May 24, 2019 · Cap vs discount tables. The next tables I made show you when a cap or a discount would apply to the SAFEs. Red and cap means a cap applies. Ignore what happens when the discount is 100% since that is obviously silly. Obviously the higher the discount, the more likely it is that a discount will apply.

https://www.alexanderjarvis.com/post-money-safe-calculator/

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» Introducing the Simple Safe Spreadsheet (for pre- and/or ...

(7 days ago) Aug 10, 2016 · Similar to a convertible note, the Safe can be tailored to include a valuation cap, a discount or both (or neither), allowing it to be easily customized for the investor. Customizations may also include additional protections for major investors, such as rights of first offer (ROFO) , observer rights , information rights and other rights.

https://exhibit10.com/2016/08/10/if-your-startup-needs-seed-capital-use-y-combinators-simple-agreement-for-future-equity-safe-and-this-simple-safe-calculator-for-high-velocity-fundraising/

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Numerical Example: SAFE, cap, no discount | FundersClub

(9 days ago) Numerical Example: SAFE, cap, no discount. Investor has purchased a safe for $100,000. The Valuation Cap is $5,000,000. The company negotiates with investors to sell $1,000,000 worth of Series A Preferred Stock at a $10,000,000 pre-money valuation. The company’s fully-diluted outstanding capital stock immediately prior to the financing ...

https://fundersclub.com/learn/safe-primer/safe-numerical-examples/safe-cap-no-discount/

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Convertible Debt - Valuation Cap, Conversion Discount and ...

(10 days ago) the Conversion Cap: $4M. the Conversion Discount applied to the Pre-Money Valuation: 15% off of $5M = $4.25M. So we use the Conversion Cap valuation of $4M to convert. The Investors in the Convertible Debt round get 100,000 * ($500k / $4M) = 12,500 shares. Example 2: a VC invests $2.5M on a pre-money valuation of $4M.

http://www.reportally.com/cap-table-university/convertible-debt-valuation-cap-conversion-discount-and-how-convert

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Understanding The Valuation Cap | Cooley GO

(9 days ago) Jun 13, 2014 · In response to this general trend, early investors started introducing a conversion mechanic (the so-called “cap”) designed to provide a ceiling on the price the note holders would be deemed to pay for the stock they get on conversion. For example, if your business raises a venture round at a $10 million pre-financing valuation but your ...

https://www.cooleygo.com/understanding-the-valuation-cap/

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Demystifying SAFEs: The good, the bad, and the ugly ...

(9 days ago) Jul 30, 2020 · Understanding how the Valuation Cap and Discount work in practice can be best illustrated by working through the math. Valuation cap. As an example of a Valuation Cap being used for conversion, let’s assume we have a SAFE investment of $500,000, with a Valuation Cap …

https://www.dlapiper.com/en/canada/insights/publications/2020/07/demystifying-safes/

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Y Combinator – SAFE Primer | Genius

(11 days ago) Dec 06, 2013 · No Cap or Discount, MFN Provision - This is a SAFE with no Valuation Cap and no Discount Rate. If the company subsequently issues SAFEs with …

https://genius.com/Y-combinator-safe-primer-annotated

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Valuation Cap: What Does it Mean And Why is it Important ...

(7 days ago) Aug 29, 2020 · A valuation cap provides SAFE or convertible note holders an opportunity to convert their investment into equity at the lower end of the valuation cap, or the price in subsequent funding rounds. Put simply, a valuation cap ensures that an investor’s contribution to a startup or company via a SAFE or convertible note is converted into equity ...

https://www.fullstack.com.au/valuation-cap-what-does-it-mean-and-why-is-it-important/

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Simple Agreement for Future Equity (SAFE): Cap, no Discount

(11 days ago) This tool provides a template for a Simple Agreement for Future Equity (SAFE) with a valuation cap and no discount rate, also known as a "Standard SAFE" and can be adapted to suit your organization's needs. A safe is a Simple Agreement for Future Equity. An investor makes a cash investment in a company, but gets company stock at a later date ...

https://www.colleaga.org/tools/simple-agreement-future-equity-safe-cap-no-discount

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SAFE and Convertible Note Calculator - Carta

(13 days ago) Jun 02, 2021 · SAFEs Select the Safe type (pre-money or post-money). Input the Principal, Valuation Cap, and Discount. (Share price, converted shares and Ownership percentage will populate automatically when the model runs calculations.) Convertible Notes Input the Principal + assumed interest to be accrued, Valuation Cap, and Discount.

https://support.carta.com/s/article/safe-note-calculator

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Simple SAFE Spreadsheet for Pre-Money Safes with Valuation ...

(10 days ago) Mar 29, 2021 · If the SAFE has both a discount and cap, Investor will be issued Series A-1 preferred shares ("SAFE Preferred Stock") at either the Discount Price or the SAFE Price (i.e., Valuation Cap price) below, whichever results in greater # of shares.

https://docs.google.com/spreadsheets/d/1yovtIzs_Uxg-anWP0S8L3LtmRvZlb14yPbptPizEw8w/edit

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Post Money SAFE — Math Problems. We just had another YC ...

(10 days ago) Sep 12, 2019 · If a second SAFE is issued to another investor for $600,000 at a $15,000,000 post-money valuation cap, the new investor knows that its SAFE represents 4% of the company (i.e., $600,000 divided by $15,000,000), the first SAFE still represents 10% of the company, and the founder’s share has been diluted to 86%.

https://cytlaw.medium.com/post-money-safe-math-problems-3f9afca5be61

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Pre-money versus post-money SAFE: What’s the difference ...

(10 days ago) Feb 25, 2021 · In the post-money SAFE example above, if the company decided to extend the round and raise an additional $1M, the documents would still have a $9M post-money valuation cap, but the equivalent pre-money valuation is now $7M ($9M - $2M), so the company has in effect accepted a lower valuation cap.

https://www.torys.com/insights/publications/2021/02/pre-money-versus-post-money-safe

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Justifying Valuation Cap Amount in Your Convertible Note ...

(11 days ago) Apr 06, 2013 · The discount means the future equity round valuation can be higher than the cap and the investor will still convert at a valuation that’s lower than the cap. Let’s look at a convertible note example with a $4M cap and a 20% discount.

https://shockwaveinnovations.com/justifying-the-cap-amount-in-your-convertible-note/

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The New Post-Money SAFE — What Founders and Investors ...

(9 days ago) Oct 11, 2018 · The valuation cap in the n e w SAFE is ... just last month I experienced a case where the founder incorrectly filled out the discount rate as 10% as opposed to 90%. ... A $2M SAFE with a cap …

https://medium.com/@ramyadeeb/everything-you-should-know-about-the-new-post-money-safe-agreement-e90f09b9d3a8

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What Is Simple Agreement For Future Equity (SAFE)? | Feedough

(10 days ago) Nov 05, 2020 · Example: SAFE with both valuation cap and discount. In cases when both the valuation cap and the discount clause is included in SAFE, the investor weighs both the options at the time of valuation and converts his SAFE at the lowest possible rate. Suppose XYZ LTD raised $50,000 from Mr C by issuing a SAFE with a $5M valuation cap and 40% discount.

https://www.feedough.com/what-is-simple-agreement-for-future-equity-safe/

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Understanding SAFEs and Priced Equity Rounds: Fundraising ...

(11 days ago) So, there may be the concept of a discount instead of a cap. So, instead of capping the valuation at say $6 million, it says there's a 20% discount on the series A price. There's also an uncapped SAFE, which basically just says, "I'm going to put money in now as an investor and when you do a priced round, I'll get the same price as the priced ...

https://www.ycombinator.com/library/6m-understanding-safes-and-priced-equity-rounds

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What is a valuation cap? - YouTube

(12 days ago) A valuation cap is something that applies to convertible notes. A convertible note is a security that is a hybrid of both debt and equity. Notes are issued i...

https://www.youtube.com/watch?v=sDFmHn4UOiU

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YC Safe Financing Documents | Y Combinator

(10 days ago) Download the Safe. There are four versions of the post-money safe intended for use by US companies, plus an optional side letter. As of March 2021, we’re unveiling beta versions of the “Valuation Cap, no Discount” post-money safe and optional side letter for companies formed …

https://www.ycombinator.com/documents/

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Safes · Legal Concepts for Founders

(12 days ago) Safes. The most popular replacement for convertible notes are safes (short for simple agreement for future equity), created by Y Combinator.Like convertible notes, safes can convert into preferred stock.. Types. There are three major types of safes - safes with a valuation cap, safes with a discount, and safes …

https://handbook.clerky.com/fundraising/safes

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SAFE Genie

(7 days ago) A calculator for exploring the impact of SAFEs and convertible notes on founder ownership. Complete cap table data is required for accurate scenario modeling. Continue cap table setup here. Basic Cap Table ... Valuation Cap Discount Share Price Converted Shares Ownership [[ instrument.typeText ]]

https://safegenie.io/

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Senior Property Valuation Protection Option | Arizona ...

(13 days ago) Jan 20, 2021 · NOTICE:AZTaxes.gov and UseTax.az.gov will be unavailable on Thursday, September 9 from 5:15 p.m. through 11:59 p.m. (midnight) for scheduled system maintenance. We apologize for any inconvenience. NOTICE:AZTaxes.gov will be unavailable due to scheduled maintenance on Friday, September 10 at 5:00 p.m.The website will be back online by Sunday, September 12 at 10:00 p.m.

https://azdor.gov/forms/property-tax-forms/senior-property-valuation-protection-option

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Post-Money Valuation Cap and Discounts: Key Terms to Know ...

(12 days ago) Using SAFEs or convertible debt notes when you raise money for your startup is becoming more and more popular. In today’s video, we’ll go through two key ter...

https://www.youtube.com/watch?v=oG61d9PES2I

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Transfer Pricing: The New Temporary Cost-Sharing Regs.

(8 days ago) The present value of the PCT payor’s cost-sharing alternative is the present value of the stream of the reasonably anticipated residuals, over the duration of the CSA activity, of divisional profits or losses, minus operating cost contributions, minus intangible cost contributions, minus PCT payments (Temp. Regs. Sec. 1.482-7T(g)(4)(ii)).

https://www.thetaxadviser.com/issues/2009/apr/transferpricingthenewtemporarycost-sharingregs.html

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What is a valuation cap? - LegalVision

(9 days ago) If the valuation of the company on conversion was actually $1.2 million (price per share is now $1.20), but the valuation cap was $1 million, the investor would still receive 100,000 shares ($100,000 / $1 per share) due to the valuation cap, rather than 83,333 shares in the absence of a valuation cap ($100,000 / $1.20 per share).

https://legalvision.com.au/q-and-a/what-is-a-valuation-cap/

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Understanding The New Post-Money Safe | Dallas Business ...

(8 days ago) The post-money Safe solves for this, but to the detriment of the founder. Using the same example as above, let’s say Franny thought she wanted to raise $200k in her Safe round, give up 10% equity for that $200k, and use the new Post-Money Safe. She would thus set the post-money valuation at $2M (or a pre-money valuation of $1.8M). $200k/$2M ...

https://velawoodlaw.com/understanding-the-new-post-money-safe/

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How to Read a Safe Term Sheet. Your Ultimate Safe Glossary ...

(11 days ago) Jan 19, 2016 · The glossary is built so you can follow along — each term is listed in the order it appears in Y Combinator’s Safe: Cap and Discount term sheet. Valuation Cap: The maximum valuation …

https://medium.com/hyde-park-angels/how-to-read-a-safe-term-sheet-c0f7d32bffed

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What is the Discount Rate in equity crowdfunding SAFEs ...

(8 days ago) Jul 20, 2021 · When valuation cap is a better deal: if the company was raising their next financing round at a $20 million valuation and converting the SAFEs, then your SAFE would either convert at a 20% discount ($20M*.8 = $16M), or a $10M valuation cap. In this case – $16M vs. $10M – the valuation cap of $10M gives the investor a better deal and would ...

https://crowdwise.org/forums/discussion/what-is-the-discount-rate-in-equity-crowdfunding-safes/

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Fundraising for your company: convertibles and SAFEs vs ...

(11 days ago) Apr 22, 2020 · Since SAFEs aren’t debt instruments, they have no maturity dates or interest rates, but they do typically come with a valuation cap and/or conversion discount. However, unlike convertible notes, which require the company to raise a certain amount of capital for equity conversion, SAFEs typically convert at any dollar amount the company raises ...

https://carta.com/blog/convertibles-safes-priced-rounds/

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Official Y Combinator Safe Financing Documents - cap table

(10 days ago) It contains YC's latest safe version, post-money safe v1.1. To help a growing number of YC companies based outside of the U.S. (50% of the W21 batch), YC revised the most commonly used "Valuation Cap, no Discount” post-money safe and optional side letter for companies formed in Canada, the Caymans and Singapore in March 2021.

https://support.captable.io/article/132-official-y-combinator-safe-financing-documents

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A Convertible Loan Note, a KISS or a SAFE: how do I choose?

(11 days ago) Oct 04, 2017 · • Conversion price is lesser of valuation cap or discount. • Converts automatically to preferred stock when an equity round of any size occurs. • Conversion price is lesser of valuation cap or discount (if specified in the SAFE document). Sale of company: Option to:

https://www.supportscaleup.com/convertible-loan-note-kiss-safe-choose/

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Simple Agreement for Future Equity (SAFE): Discount, no Cap

(13 days ago) This tool provides a template for a Simple Agreement for Future Equity (SAFE) with a discount rate and no valuation cap and can be adapted to suit your organization's needs. A safe is a Simple Agreement for Future Equity. An investor makes a cash investment in a company, but gets company stock at a later date, in connection with a specific event.

https://www.colleaga.org/tools/simple-agreement-future-equity-safe-discount-no-cap

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SAFE Note: Definition, How They Work, Key Terms (2021)

(12 days ago) For example, if the company offered SAFE note holders a 20% discount and achieves a valuation of $10 million, with shares available to new investors at $10, the SAFE investors will be able to buy their shares at $8, thus receiving a 20% discount. Valuation Caps: Another way for the investor to get a better price per share than future investors ...

https://www.contractscounsel.com/t/us/safe-note

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Convertible Note | Examples and How It Works | SeedInvest

(12 days ago) Nov 13, 2014 · The 20% discount would again result in an $8 per share price for note holders. Because dividing the $4M valuation cap by the $4.5M pre-money valuation and applying that to the $10 share price results in a higher $8.89 per share price for seed round investors, in this case it would be the discount that drives the conversion.

https://www.seedinvest.com/blog/startup-investing/how-convertible-notes-work

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