Tech, AI and SaaS
SAFE round
Your pre-seed or seed round on SAFEs, including the securities filing. Taking money from investors.
What it is
A SAFE, or simple agreement for future equity, is a short contract in which an investor funds the company now for the right to shares later. It usually converts when you raise a priced round. We prepare the SAFE and the board approval, review which prospectus exemption the round relies on, and make the securities filing.
Issuing a SAFE in Ontario is a distribution of securities, so it needs a prospectus exemption, and some exemptions require a report to the Ontario Securities Commission within 10 days. The valuation cap and discount you sign also decide how much of the company you give up when it converts.
You likely need this if
- An angel or early investor wants to put money in before a priced round
- You’re raising a pre-seed or seed round
- An investor sent you a SAFE written for US companies
- You want to understand the cap and discount before you sign
What the starting price includes
- SAFE agreement
- Board approval
- Prospectus exemption review and the securities filing for the round
What can change the price
- Number of investors
- Side letters
- Investors outside Ontario
We tell you before doing anything outside the agreed scope, and agree the fee first.
Often needed with it
Questions founders ask
How does a SAFE convert into shares?
At the priced round, the investor’s money converts at whichever price is better for them: the price implied by the valuation cap, or the round price less the discount. A low cap can mean more dilution than founders expect, so it’s worth modelling your cap table first.
Can we use Y Combinator’s SAFE?
Y Combinator’s forms are written for US companies. A version adapted for Canada, checked against your share structure, avoids terms that don’t fit a Canadian corporation.
Do we have to file anything?
Often. If you rely on the accredited investor exemption, a report of exempt distribution is due to the Ontario Securities Commission within 10 days, with a filing fee charged at cost. The private issuer exemption doesn’t require that report.
General information, not legal advice.
How it works
- A free 15-minute call. What you’re building and what you need.
- A written scope and fixed fee. Before any work starts.
- A short, tailored intake. A few focused questions for your matter, so we start with what we need.
- Drafting or review. Most work is back within three business days.