Simple Agreement For Future Equity Template for United Arab Emirates

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Key Requirements PROMPT example:

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."

Document background
The Simple Agreement for Future Equity (SAFE) has become an increasingly popular investment instrument in the UAE's growing startup ecosystem. This document is specifically designed for situations where startups need to raise capital quickly and efficiently, without immediately setting a company valuation or issuing equity. The agreement complies with UAE Federal Law No. 32 of 2021 and related regulations while providing a standardized framework for investment. It includes essential provisions for future equity conversion, specifies triggering events, and outlines investor rights. The SAFE is particularly suitable for early-stage companies in the UAE that expect to raise priced equity rounds in the future and want to defer complex valuation discussions while securing immediate funding. The document includes specific provisions to ensure compatibility with UAE company law requirements and local business practices.
Suggested Sections

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

Optional Sections

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

Suggested Schedules

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

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

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

Relevant Teams

Legal

Finance

Corporate Development

Investment

Compliance

Executive Leadership

Business Development

Company Secretariat

Relevant Roles

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

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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