Thanks-The video is super clear and very helpful. One quick question: Is the SAFE agreement subject to federal and state securities laws and regulations? Do I need to register the financing with the SEC and state regulators?
Good question. You don't need to file anything, that's the benefit of a SAFE. You just use the contract to get the financing and you're off building your empire! You should for sure have legal look at/write the contract and confirm with you that all your ducks are in a row.
Thanks for great teachings. Question So who/what controls right of investor to sell this contract or the business owner to buy it back? is that out of the scope of the SAFE contract? Can it be included, if so how and what are typical terms/provisions? thanks AJ in Michigan
Great question! Normally there is a "lead investor" assigned to be the point of contact for all SAFE holders in the round. This doesn't actually have to be the biggest investor, just someone that is assigned this position.
Is it reasonable if the SAFE to raise ceiling changes after your investment? Say I provided 25k with the expectation that only 1M was going to be raised under safe and owner changes the number to 4M. The scenario isn't covered under a simple safe agreement and the safe didn't have an initial valuation. Is there a recourse for the early investor? I see the downside as it will only convert under a lot higher valuation. Can I ask for a valuation cap after the fact?
Good question! That's the goal of a Valuation Cap so that the amount raised doesn't impact your initial investment. The determining factor of future dilution lies mostly in the valuation cap. If you didn't have a Cap in the SAFE contract, you'll need a different contract/amend the original to include that.
Once you obtain equity by this means, then how does the ROI go, hypothetically? If the company goes public or remains private, then what could you expect on a return in either case, percentage wise? though I know that may vary by company, but what do you look out for? How do you find that information out by their listing? I followed through from a comment on you unbanked investment video. Many are asking questions on Republic, about their extension from their $15m eval cap to the current round at a $115M eval cap & many were concerned..though they explained in many comments, that they had others want to invest,after tax season & they are doing a rolling close. Can you speak more on this situation? &/or do a follow up to the unbanked investment video to address this & in general my ROI question on a SAFE going public or remaining private? ie; does this equity convert to stock in an IPO in the future for example & if private,then what?
Good question! That mostly depends on two things: 1) the exit valuation (how much the company sells for in the future or what the public share price becomes) and 2) how much more funding (dilution) the company has in the future before exit. Let’s say there was no dilution and the company sold for $100M then you’d theoretically 5x your initial investment. With additional rounds that ROI could be much lower.
To be fair much of what I see described as passive income really isn't passive. Many people call property investment is passive incom but they are so wrong. How can you define something "passive" when you have to follow the trend, the market all the time. Passive income does not mean either "doing nothing to have money" or "other stream of income besides your 9-5 jobs". To me it means that you have to do something important steps at firsts, like researching, building your assets, putting you money on it, then in will pay you a certain amount of money later without you doing anything. My favorites passive income is the money i gain from leasing and buyback investment which requires me to do nothing. I just need to relax and wait for the money to run into my account. you can search the term leasing and buyback investment with foundation capital to know more.
💰Learn how to INVEST in startups, build wealth, and diversify your portfolio. Link below:
www.startupinvestoracademy.com/?
Subscribed. Probably the best, most efficient video on SAFE agreements. Well done and well explained.
Thanks for watching! Appreciate it. Good luck out there :)
This is great content, we are raising capital and this was very clarifying for our tech startup
super clear! great info! thanks
Great video!! This was so helpful for me. Very to the point which is so much better than any written content I came across on this. Thanks!
Great! Glad you liked it! Thanks for watching!
Very helpful! Thanks for making this video.
Thanks-The video is super clear and very helpful. One quick question: Is the SAFE agreement subject to federal and state securities laws and regulations? Do I need to register the financing with the SEC and state regulators?
Good question. You don't need to file anything, that's the benefit of a SAFE. You just use the contract to get the financing and you're off building your empire! You should for sure have legal look at/write the contract and confirm with you that all your ducks are in a row.
Super useful! This video actually explains how a SAFE works!
W•H•A•T•S•A•P•P• +•1•8•1•5•2•4•2•5•0•8•7 l~n~v~e~s~tC•r•y•p•t•o B•T•CA•N•D•E•T•H...........
Excellent video. Really helpful.
Trying to raise some cap based on SAFE , perfect timing on this one.. Appreciate it. Very crisp !
Great to hear! Good luck with the raise! 🚀
W•H•A•T•S•A•P•P• +•1•8•1•5•2•4•2•5•0•8•7 l~n~v~e~s~tC•r•y•p•t•o B•T•CA•N•D•E•T•H...........
You get right to it!
Useful video, thanks!
You bet! Thanks for watching :)
Terrific and very helpful
thank you for sharing your tips, as always!!
W•H•A•T•S•A•P•P• +•1•8•1•5•2•4•2•5•0•8•7 l~n~v~e~s~tC•r•y•p•t•o B•T•CA•N•D•E•T•H...........
Thanks for great teachings. Question So who/what controls right of investor to sell this contract or the business owner to buy it back? is that out of the scope of the SAFE contract? Can it be included, if so how and what are typical terms/provisions?
thanks AJ in Michigan
Great question! Normally there is a "lead investor" assigned to be the point of contact for all SAFE holders in the round. This doesn't actually have to be the biggest investor, just someone that is assigned this position.
Yes but should the contract have that investor determine WHEN they wish to sell?
@@fksebati
A great video! You explained very well!
W•H•A•T•S•A•P•P• +•1•8•1•5•2•4•2•5•0•8•7 l~n~v~e~s~tC•r•y•p•t•o B•T•CA•N•D•E•T•H...........
Very well done video.
W•H•A•T•S•A•P•P• +•1•8•1•5•2•4•2•5•0•8•7 l~n~v~e~s~tC•r•y•p•t•o B•T•CA•N•D•E•T•H...........
Is it reasonable if the SAFE to raise ceiling changes after your investment? Say I provided 25k with the expectation that only 1M was going to be raised under safe and owner changes the number to 4M. The scenario isn't covered under a simple safe agreement and the safe didn't have an initial valuation. Is there a recourse for the early investor? I see the downside as it will only convert under a lot higher valuation. Can I ask for a valuation cap after the fact?
Good question! That's the goal of a Valuation Cap so that the amount raised doesn't impact your initial investment. The determining factor of future dilution lies mostly in the valuation cap. If you didn't have a Cap in the SAFE contract, you'll need a different contract/amend the original to include that.
Are you saying that the discount is applied on the valuation cap? Then why not set the valuation cap at 8 in the first place
I'm wondering about how should the investor recognizes such investment on his books and what disclosers about the SAFE are required
Once you obtain equity by this means, then how does the ROI go, hypothetically? If the company goes public or remains private, then what could you expect on a return in either case, percentage wise? though I know that may vary by company, but what do you look out for? How do you find that information out by their listing? I followed through from a comment on you unbanked investment video. Many are asking questions on Republic, about their extension from their $15m eval cap to the current round at a $115M eval cap & many were concerned..though they explained in many comments, that they had others want to invest,after tax season & they are doing a rolling close. Can you speak more on this situation? &/or do a follow up to the unbanked investment video to address this & in general my ROI question on a SAFE going public or remaining private? ie; does this equity convert to stock in an IPO in the future for example & if private,then what?
If the start up do well, what can I expect if I invest 5500$ in a company with a 3.5 million validation cap?
Notes I can copy as I listen get the extra attention with a comment and like
Thanks for watching
One quick note: a convertible note is a debt paid not in cash but in shares
This depends on the terms of the convertible note. Normally this is a cash payment with accruing interest like a traditional loan from a bank.
So lets say i invest $1000 into a company with a $20mil valuation cap how much could i expect to make?
Good question! That mostly depends on two things: 1) the exit valuation (how much the company sells for in the future or what the public share price becomes) and 2) how much more funding (dilution) the company has in the future before exit. Let’s say there was no dilution and the company sold for $100M then you’d theoretically 5x your initial investment. With additional rounds that ROI could be much lower.
To be fair much of what I see described as passive income really isn't passive. Many people call property investment is passive incom but they are so wrong. How can you define something "passive" when you have to follow the trend, the market all the time. Passive income does not mean either "doing nothing to have money" or "other stream of income besides your 9-5 jobs". To me it means that you have to do something important steps at firsts, like researching, building your assets, putting you money on it, then in will pay you a certain amount of money later without you doing anything. My favorites passive income is the money i gain from leasing and buyback investment which requires me to do nothing. I just need to relax and wait for the money to run into my account. you can search the term leasing and buyback investment with foundation capital to know more.
I am from India, we have to tweak the agreement to comply with local laws. In case you have any written material, please share it with me.
Hello sir, i would like to get intouch with you please upvote if acceptable
So how do I get my money back?
Your background music detracts from a good video. Bass boom thud boom. Sorry.
Thanks! Will keep that in mind for the next video!