An investor wants in and sends over a "SAFE." It looks short and friendly. It also quietly decides how much of your company you're giving away, so read on before you sign.

A SAFE, a Simple Agreement for Future Equity, is an investor handing you money now for the right to shares later, usually when you raise a priced round. No interest, no deadline, just a promise to convert down the line. It's common and founder-friendly, which is why so many people sign one without slowing down.

Two terms do the real work. A valuation cap sets the highest company value at which their money converts, so a low cap gives the investor a bigger slice than you might expect. A discount lets them convert cheaper than later investors. Stack a few SAFEs with different caps and the math gets away from founders fast, they end up owning far less than they thought.

The instrument is simple. The consequences are not.

Before you sign anything that converts into ownership, it's worth having someone walk the terms with you. We read these with founders and show you what you're really agreeing to, free, if you qualify.