SAFE (simple agreement for future equity) – Setup and Modify

By now you might know that Eqvista is very easy to use. And when it comes to issuing shares and convertible notes, all the options are available on Eqvista. Here is a step-by-step process to issue and modify SAFE convertible notes on Eqvista.

Step 1: Log into your Eqvista account and choose the company account that you want to issue the security from. 

Once you do this, you will be directed to the main dashboard page where you need to click on “Securities” from the left-hand side panel. From this menu, click on “Convertible Instruments”. 

Step 2: Once done, you will be directed to a new page. On this page, you will see all the convertible securities that are there in the company. To create a SAFE, you need to click on the button that says “Issue Instrument” on the top right-hand side.

Step 3: After this, you will be directed to another page where you will need to add the details to set up and issue the SAFE.

You will first have to select the name of the shareholder to whom you will be issuing this SAFE security. In short, select the name of the shareholder from the available list or create a new shareholder profile. Check out the support article here to add a shareholder.

Step 4: Once you do this, three other fields will appear. They are:

• Convertible Note Name
• Issue Date
• Note Type: Here you will need to select the note type, which would be the Y Combinator SAFE. Once you select this option, two other panels will show up with one field in each.

Note: A SAFE is also called the Y Combinator SAFE. On Eqvista, you will find two types – Y Combinator SAFE and YCVC SAFE.

Step 5: Once you add in the details of the Note Type, two fields will appear. The first field below this would be the one for filling the principal amount, which is the amount that the company borrows from the security holder.

The second field is – Converts to: This is the type of stock the convertible note converts to. Choose from common or preferred stock. Select the kind of stock that the convertible note would turn into. In this case, we selected common stock.

Step 6: As you select the type of shares that the security converts to, some other fields appear, including:

• Conversion Trigger Amount: This is the minimum amount that will trigger the conversion rate.
• Valuation Cap: The maximum company valuation when converting the note to shares. 
• Early Exit Multiple: This is the guaranteed multiplied of the principal paid out.
• Conversion Discount: This is the discount applied on the purchase of shares during the valuation of the company.

Fill in all the details based on your plan and click on “Submit”.

Step 7: After this, you will be directed to the page showing the details of this SAFE you just issued. From here, click on “Actions” and a drop-down menu will appear. There are four options for altering the SAFE security here. This includes:

• Edit Note: For editing or modifying a part of the security.
• Convert to Stock: This is to convert the note to stock manually before the maturity date.
• Mark as Converted: In case you have already converted the note to stock for the investor, you can mark it converted here easily.
• Delete Note: This is to delete the security in case the deal goes off with the investor or for any other reason.

If you would like to edit the convertible note, click on “Edit Security”.

Step 8: A window will appear where you can change the details of the SAFE security.

Once you are done with adding and editing the details, click on “Save”.

Step 9: By selecting “Save”, you will be directed to the next page that shows the details of the SAFE as shown below.

Like this, you can both set up, issue and modify a SAFE on Eqvista. 

If you want to know more or understand any other process, check out our other support articles here or contact us today!