Yes, I’d Like $100,000, but What the Heck is a SAFE Note?

Photo by Alex Jones on Unsplash

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

Source: Yes, I’d Like $100,000, but What the Heck is a SAFE Note?