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Simple Agreement For Future Equity
"I need a Simple Agreement for Future Equity (SAFE) for my Dubai-based AI software company to secure a $500,000 investment from a US venture capital firm, with a post-money valuation cap of $5 million and a 20% discount rate, to be completed by March 2025."
1. Parties: Identification of the company and the investor, including full legal names, registration details, and addresses
2. Background: Brief context about the company, the purpose of the investment, and the nature of the SAFE instrument
3. Definitions: Key terms used throughout the agreement, including 'Equity Financing', 'Liquidity Event', 'Dissolution Event', and 'Post-Money Valuation Cap'
4. Investment Amount: Specification of the investment amount and payment terms
5. Events: Detailed provisions for different triggering events including Equity Financing, Liquidity Event, and Dissolution Event
6. Conversion Mechanics: Specific mechanisms and calculations for converting the investment into equity under various scenarios
7. Company Representations: Company's warranties about its legal status, authority, and compliance with UAE laws
8. Investor Representations: Investor's warranties regarding investment capacity and compliance with applicable laws
9. General Provisions: Standard clauses including notices, amendments, assignment, governing law, and dispute resolution
1. Most Favored Nation: Optional provision ensuring the investor receives the benefit of more favorable terms offered to other SAFE holders
2. Pro-rata Rights: Optional right for the investor to participate in future funding rounds
3. Board Observer Rights: Optional provision granting the investor the right to attend board meetings as an observer
4. Information Rights: Optional provisions regarding the investor's right to receive financial and other company information
5. Transfer Restrictions: Optional detailed provisions regarding the transfer of SAFE rights, particularly relevant in UAE context
6. Shariah Compliance: Optional section for ensuring compliance with Islamic finance principles if required by parties
1. Schedule 1: Investment Terms: Detailed terms of the investment including Post-Money Valuation Cap and/or Discount Rate
2. Schedule 2: Form of Participation Notice: Template notice for exercising pro-rata rights in future rounds
3. Schedule 3: Capitalization Table: Current capitalization of the company pre-investment
4. Appendix A: Conversion Calculations: Detailed examples of conversion calculations under different scenarios
5. Appendix B: Required Corporate Actions: List of corporate actions required under UAE law to implement the SAFE
Authors
Applicable Law
Board
Business Day
Capital Shares
Change of Control
Company
Conversion Price
Conversion Rights
Discount
Discount Price
Dissolution Event
Distributable Proceeds
Effective Date
Equity Financing
Equity Shares
Fair Market Value
Fully Diluted Capitalization
Governing Law
Initial Public Offering
Investment Amount
Investor
Liquidity Event
Liquidity Price
Most Favored Nation Right
Next Equity Financing
Participation Amount
Post-Money Valuation Cap
Pre-Money Valuation
Pro-rata Right
Qualified Financing
Safe Preferred Stock
Standard Preferred Stock
Subsequent Convertible Securities
UAE
Valuation Cap
Voting Agreement
Conversion Rights
Company Representations and Warranties
Investor Representations and Warranties
Events of Conversion
Liquidity Events
Dissolution Events
Voting Rights
Information Rights
Pro-rata Rights
Most Favored Nation
Transfer Restrictions
Assignment
Confidentiality
Notices
Amendment and Waiver
Governing Law
Dispute Resolution
Entire Agreement
Severability
Further Assurance
Counterparts
Electronic Execution
Force Majeure
Costs
Binding Effect
Term and Termination
Compliance with Laws
Anti-Money Laundering
Technology
E-commerce
Financial Technology
Healthcare Technology
Educational Technology
Software Development
Artificial Intelligence
Biotechnology
Clean Technology
Digital Media
Mobile Applications
Internet of Things
Cybersecurity
Cloud Computing
Retail Technology
Legal
Finance
Corporate Development
Investment
Compliance
Executive Leadership
Business Development
Company Secretariat
CEO
CFO
General Counsel
Legal Director
Investment Manager
Venture Capital Associate
Angel Investor
Startup Founder
Corporate Development Manager
Business Development Director
Investment Analyst
Legal Counsel
Company Secretary
Finance Director
Compliance Officer
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