Sputnik ATX co-founder Josef Merrill quoted below:
Yes, I’d Like $100,000, but What the Heck is a SAFE Note?
“There are two problems with early stage investing: telling how much a company is worth when truthfully, it is still worthless; and helping early-stage companies protect themselves from over dilution when they are, effectively, worthless. Two sides of the same intractable coin.
To solve this, VCs and entrepreneurs need a quick and easy way to provide seed funding, without a long, drawn out negotiation, onerous debt covenants, or a crazy valuation that could hurt the investor and/or the entrepreneur. YC came up with a novel way to do this in 2013 called the SAFE note.
When Sputnik ATX funds a company in our program, we give them $100,000 through a SAFE note. This begs the questions, what is a SAFE note, and why use it?
This article answers these two main questions, and summarizes a few of the terms of the Sputnik ATX SAFE note.
First, what is a SAFE Note?” – Josef Merrill, co-founder Sputnik ATX
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