# Raising SAFEs ### SAFE Terms and Information As a fundraising strategy, founders may want to collect small amounts in SAFEs from strategic angels and other investors to generate momentum for the round. The goal of these SAFEs is to demonstrate traction and leverage early investor interests into introductions to potential lead investor(s) for a priced round. OCV’s initial SAFE investment does not contain any discount, valuation cap, or MFN clause. To reduce friction and accelerate speed for the Seed round, OCV companies can collect up to $400K in SAFEs under the following terms: 1. Maximum discount of 15%, or 2. $20M pre-money valuation cap, whichever calculation results in a greater number of shares of SAFE Preferred Stock. 3. No MFN clause. The spirit of these standardized terms is to ensure that SAFE investors in the same round receive the same terms. It is easier to amend previously issued SAFEs to be on the same (more favorable) terms as later SAFEs than to correct for any unintended misapplication of MFN. At these thresholds, OCV does not need to approve each SAFE, and there is no impact to OCV’s SAFE terms (i.e., OCV SAFE will convert at the priced round, without a valuation cap or discount). This is documented in the Company’s certificate of incorporation or OCV’s [SAFE Side Letter](https://handbook.opencoreventures.com/ocv-employees/vc-ops/company-formation-process/incorporation-steps-1-8#safe-side-letter). For a typical batch of \~5-10 angel checks, we recommend direct SAFEs rather than consolidating through a Roll-Up Vehicle (RUV). SAFEs are faster to close, keep angels directly on the cap table, preserve investor relationships, and align with what institutional investors expect at later rounds. We ask founders to keep OCV updated on their fundraising status, including the issuance of any new SAFEs. A board resolution (prepared by the Legal Team) is required before the SAFEs can be executed and funded. Ultimately, a priced Seed round is preferred because it provides simplicity and visibility around CapTable structure under OCV’s model: 1. A priced round allows for an [options pool refresh](/startup-manual/fundraising/fundraising-process.md#seed-round-options-pool) with a known total share count (modeling with SAFEs requires making up assumptions about the next priced round) 2. Opportunity to issue any new founder grants, if approved by the board. Vesting would start earlier than the next priced round. If a company exceeds $400K in SAFEs, OCV will amend the initial OCV SAFE to reflect the same terms offered to other investors, as outlined above. To issue pre-Seed SAFEs, founders can populate this [OCV SAFE Template](https://docs.google.com/document/d/1jWA7gZyQ110-SjEv6HYjCjB47N0M7hqT/edit?usp=sharing\&ouid=114605482382680978191\&rtpof=true\&sd=true) and send it to the investor via the company’s CapTable management system: * Under “Fundraising” > “SAFE financings” > “Add “SAFE” > select: “I have a filled SAFE document to be signed” > upload drafted SAFE and follow remaining steps. ### Process for Issuing SAFEs Follow the below process to issue and close a SAFE. For efficiency and to keep legal costs down, batch investor information where possible rather than submitting one at a time. 1. **Investor Outreach and Information Collection:** Collect each angel's name, entity name/signatory details (if investing through an entity), email, address, and intended investment amount to prepare each individual SAFE. Founders can either send this information to the Legal Team directly or include Legal on threads with the angels. 1. **Investor Suitability Questionnaire:** Each angel must execute an Investor Suitability Questionnaire. Because the questionnaire captures most of the above information (except for investment amount), the founder can either send the angel the blank questionnaire and have them provide information by executing it, or populate it separately and send to the angel for easy execution. 2. **Board Consent:** Prior to any SAFE being executed, the Legal Team will prepare a Board Consent authorizing the SAFE financing. This can be handled once there is an estimate of aggregate round size. 3. **SAFE Preparation and Execution:** The Legal Team prepares an individual SAFE for each angel, pre-populated with their information and the agreed terms, and circulates for signature by the investor and the company via DocuSign. 4. **Closing and Wiring:** Once a SAFE is fully executed, the investor wires funds directly to the company's account. Each SAFE is dated and considered closed as of the date funds are received. 5. **Post-Closing:** The Legal Team updates the cap table on Carta to reflect the new SAFEs and prepares any applicable state securities law filings. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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