--- title: "SAFE, Simple Agreement for Future Equity | MedTech Terms" description: "Convertible instrument that converts to equity at a future priced round. Plain-English Investment & Finance definition for MedTech teams, with examples and rela" lang: en json-ld: | { "@context": "https://schema.org", "@graph": [ { "@type": "DefinedTerm", "@id": "https://medtechterms.com/terms/safe-note#term", "name": "Simple Agreement for Future Equity", "alternateName": "SAFE", "description": "A SAFE is a financing contract created by Y Combinator in 2013 that gives investors the right to receive shares in a future priced equity round, typically at a discount and/or subject to a valuation cap. 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[Home](/) 2. / 3. [Terms](/terms) 4. / 5. [Investment & Finance](/terms?cat=Investment%20%26%20Finance) 6. / 7. Simple Agreement for Future Equity [All terms](/terms) Investment & Finance [Startup Lifecycle](/ecosystems/startup-lifecycle)SAFE # Simple Agreement for Future Equity Convertible instrument that converts to equity at a future priced round. Reviewed by [Christian Espinosa, Founder, Blue Goat Cyber](/authors/christian-espinosa) Last reviewed May 5, 2026 ## Definition A SAFE is a financing contract created by Y Combinator in 2013 that gives investors the right to receive shares in a future priced equity round, typically at a discount and/or subject to a [valuation cap](/terms/valuation-cap). Unlike convertible notes, SAFEs carry no interest rate and no maturity date. What the regulation says SAFEs are securities under U.S. federal law and must be issued under an exemption (typically Reg D 506(b) or 506(c)). Form D filings and state blue-sky notices apply. ## What this means in practice Early-stage MedTech companies often raise seed capital through SAFEs to defer the valuation discussion until clinical or regulatory milestones (first-in-human, 510(k) submission, [CE mark](/terms/ce-mark)) materially de-risk the company. Stacking many SAFEs without modeling [dilution](/terms/dilution) at conversion is a frequent founder mistake. ## Examples - A diagnostics startup raises $2M on a post-money SAFE with a $15M cap to fund an analytical validation study. - An implant company uses a discount-only SAFE for a strategic angel before its Series A. Common pitfalls - • Confusing pre-money and post-money SAFEs - post-money SAFEs guarantee the investor's ownership percentage and are far more dilutive at conversion. - • Issuing too many SAFEs with different caps, creating a 'SAFE stack' that surprises founders at the priced round. ## Related terms Grouped by theme ### Editor's picks · Hand-selected related concepts [ Investment & Finance Convertible Note Short-term debt that converts into equity at a future financing round. ](/terms/convertible-note)[ Investment & Finance Valuation Cap Maximum company valuation at which a SAFE or note converts to equity. ](/terms/valuation-cap) ### More in Investment & Finance · Same category [ Investment & Finance 409A Valuation An independent fair-market-value appraisal of common stock used to set tax-compliant strike prices for employee stock options. ](/terms/409a-valuation)[ Investment & Finance Anti-Dilution Protection Adjustment that protects investors if the company raises a future round at a lower price. ](/terms/anti-dilution)[ Investment & Finance Bridge Round Interim financing between priced rounds, usually convertible. ](/terms/bridge-round)[ Investment & Finance Burn Rate Rate at which a company spends cash, typically expressed monthly. ](/terms/burn-rate) Cited by Where this term appears across MedTech Terms. Ecosystems (1) - [Startup Lifecycle](/ecosystems/startup-lifecycle) ## Mentioned in recent activity 2 entries Trials (2) [AI-Enabled Mobile App for Safe Eating in Older Adults With Dysphagia ](https://clinicaltrials.gov/study/NCT07654088) KAM Chi Shan Anna · 2028-01-01 [An Evaluation of Multisense® to Ensure a Safe Return Home Following High-risk Gastrointestinal Surgery, Compared With Standard Care. ](https://clinicaltrials.gov/study/NCT07552805) Rhythm Diagnostic Systems · 2026-05-18 ## Latest in MedTech [View all](/latest?term=safe-note) Recent regulatory actions, publications, and trials matched to this term. Updated daily. - Trial 2026-05-18 [An Evaluation of Multisense® to Ensure a Safe Return Home Following High-risk Gastrointestinal Surgery, Compared With Standard Care. ](https://clinicaltrials.gov/study/NCT07552805) Rhythm Diagnostic Systems · NOT\_YET\_RECRUITING ## Primary references 3 sources Link health: 3 verified · last checked 2026-06-20 Y Combinator· 1 SEC· 1 NVCA· 1 1. [1 Y Combinator SAFE Verified Y Combinator · ycombinator.com ](https://www.ycombinator.com/documents) 2. [2 SEC Investor Bulletin: SAFEs Verified SEC · sec.gov ](https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_safes) 3. [3 NVCA Model Documents Verified NVCA · nvca.org ](https://nvca.org/model-legal-documents/) Inline markers like \[1\] jump to the matching reference above. Sponsor note ### Diligencing a MedTech cybersecurity posture? Blue Goat Cyber supports investors and acquirers with cybersecurity diligence on connected MedTech assets. [Book a 30-minute discovery session](https://go.bluegoatcyber.com/meetings/blue-goat-cyber/discovery-session) - No obligation - Expert-led from minute one - NDA available on request MedTech Terms is a community resource sponsored by [Blue Goat Cyber](https://bluegoatcyber.com). Definitions are independent of any vendor. On this term Category Investment & Finance Acronym SAFE Sources 3 Updated 5/5/2026 [Compare with another term](/compare?a=safe-note) Learn in 60 seconds Card Lesson Quiz Convertible instrument that converts to equity at a future priced round. - · Stacking many SAFEs without modeling dilution at conversion is a frequent founder mistake. - · Unlike convertible notes, SAFEs carry no interest rate and no maturity date. Remember this Watch out: Confusing pre-money and post-money SAFEs - post-money SAFEs guarantee the investor's ownership percentage and are far more dilutive at conversion. Related terms - [Convertible Note ](/terms/convertible-note) - [Valuation Cap ](/terms/valuation-cap) You may also need Auto-suggested from Investment & Finance and shared keywords. - [409A Valuation ](/terms/409a-valuation) - [Bridge Round ](/terms/bridge-round) - [Drag-Along and Tag-Along Rights ](/terms/drag-tag-along) - [Liquidity Event ](/terms/liquidity-event) - [Capitalization Table(Cap Table) ](/terms/cap-table) - [Employee Option Pool ](/terms/option-pool) [All Investment & Finance terms](/terms?cat=Investment%20%26%20Finance) MedTech Terms An authoritative, plain-language reference for the regulatory, quality, cybersecurity, and software terms that shape modern medical devices. 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