Crowd SAFE is an investment agreement between founders and investors that most companies use on Republic. It's simple and super founder-friendly, allowing founders to maintain control while bringing in the funds needed to achieve their growth milestones.
The Crowd SAFE allows all investors in your Republic campaign to be represented as one line item on your cap table. It helps startups fundraising under Reg CF avoid "messy cap table" concerns, save legal fees, and reduce the time spent structuring the terms of their financing.
With the Crowd SAFE, investors only convert at a liquidity event––an acquisition, IPO, or change of control. Unlike a traditional SAFE, they don't automatically convert at subsequent equity financing. This ensures investors are never on the cap table as individuals. (That is, unless you'd like them to be––we can make that work, too.)
The Crowd SAFE is designed with simplicity in mind. Raising $500,000 with Republic through the Crowd SAFE has the same economics as one VC writing a $500,000 check using a SAFE.
Of course, these investors are still diluted in the same way a traditional SAFE-holder would be.
With the Crowd SAFE, investors have very limited voting and information rights. In other words, you're in control.
Crowd SAFE terms can be modified to fit each company's specific needs. It is a living, breathing document open to revision on a case-by-case basis.
It's an awesome template, but we do recommend companies evaluate the agreement with support from experienced counsel.
In 2013, Y Combinator created the SAFE (Simple Agreement for Future Equity) to allow startups to raise early-stage capital from angels and VCs. It's essentially a convertible note without interest and a true maturity date.
When Regulation Crowdfunding (or “Reg CF” for short) was enacted by the SEC in 2016, we launched Republic to allow everyday people to invest in the startups they believe in.
This new, democratized means of raising funds required a new kind of investment instrument—one tailor-made for providing investment opportunities to a wide range of individuals—the 97%—rather than just a handful of wealthy angel investors and VCs.
Enter: the Crowd SAFE. Republic's in-house legal team designed the Crowd SAFE specifically with Regulation Crowdfunding in mind. It's founder-focused and offers three main, game-changing benefits: a clean cap table, simple economics and founder control.
Crowd SAFE and CrowdSafe are trademarks of Republic and are registered with the United States Patent and Trademark Office.
Despite the use of the word “Safe” in the term “Crowd SAFE”, Crowd SAFE investments do not represent a safe investment, there is a high degree of risk.
There is no guarantee that triggering events will occur, meaning an investor can lose all of their investment. Terms of a Crowd SAFE may vary from deal to deal, please consult each issuer’s Crowd SAFE for the terms of the offering. The value of a return on a Crowd SAFE will be directly affected by the valuation of the company at the moment of liquidity, please consult the terms of a Crowd SAFE for more information.
Republic provides these investment instruments solely for educational purposes — investors, issuers and investment professionals should do their own research and seek their own legal counsel before utilizing these instruments. Republic cannot be responsible for your use of these instruments.
Any issuer considering crowdfunding through Republic should consult with counsel on the appropriate instrument to use in raising capital. The templates provided here are not intended to be used and require review and revision prior to adoption. The templates provided here assume the issuer’s corporate affairs are governed by the laws of the state of Delaware. Republic, its affiliates and agents disclaim all responsibility for any consequence of using any of the documents linked here.
Republic does not verify information provided by companies on this Portal and makes no assurance as to the completeness or accuracy of any such information. Additional information about companies fundraising on the Portal can be found by searching the EDGAR database.