If an LLC’s Operating Agreement contains a sufficiently broad arbitration clause, most disputes raised by the LLC’s members relating to the LLC will be sent to arbitration (instead of the court system) for resolution. But...more
When early stage founders are looking to raise money, they are often choosing between using Simple Agreements for Future Equity (SAFEs) or convertible notes. Our clients often ask what the difference is between the two and,...more
SAFE financings (it’s an acronym for “Simple Agreement for Future Equity”) were pioneered by the startup accelerator Y Combinator as a replacement for convertible notes. The idea was to create a simpler, more flexible...more
What is a SAFE? SAFE stands for “simple agreement for future equity,” and was created by Y Combinator in 2013 as an alternative to investing via convertible notes. SAFEs are neither equity nor debt – they represent a...more
Historically, most startup companies were funded either by the offering of equity or by loans in the form of convertible promissory notes. Recently, however, there have been some hybrid instruments created to fund startups....more
As the startup community continues to expand around the country, there is an ever-growing need to understand different ways that a company can structure early stage financing so that it can be equipped to discuss with its...more