SAFEs - advice neededhttps://www.rubbish.love

Kaleen's profile thumbnail
Do you have a lawyer? This is a great time for them to get involved. Doing this deal wrong can totally mess you up down the line with future investors. I just took a course on Cap Tables this weekend (am by no means an expert), but do consider what this will mean for your cap table and future investors.
elenaguberman's profile thumbnail
We do but SAFE's are meant to curb lawyers fees for early on in the game. Open to good lawyers though if you have one :-)
Kaleen's profile thumbnail
I totally understand-- I'm talking about getting help convincing the investor to do a SAFE. :-) The main takeaway I got from this seminar was to make sure you don't agree to things that might make future investors worry about your competence, etc. I have no idea what a personal guarantee means, but you want things to be very clear and manageable and documented for the future. (Apologies if you already know this/disagree/or otherwise have a plan. Just trying to contribute what I learned.)I'm working with Robert Mazzola, and think he's super knowledgeable, upfront and honest about fees (often fixed rates), and comes recommended from the local Sacramento startup scene. You can find his website here: waterstoneedge.com (or email robert@waterstoneedge.com).
Our very first angel investor was the exact same way. We went the personal guarantee. I think Y-combinator has a format for this, I believe it's called handshake deal or something. But we basically just did straight equity in exchange for the investment. At some point, way further down the line, it might be a bit more difficult if the angel is not an accredited investor. I've met with dozens of VCs so far for our pre-seed round and no one is at all concerned with the way we structured the angel investment or the cap table. Update, found the Y-Combinator article: https://www.ycombinator.com/handshake/ I'm not recommending a specific way, just letting you know how we did it and the feedback we've received since.
elenaguberman's profile thumbnail
Thanks so much for sharing! We ended up closing on a SAFE after he spoke with some references who told him a little more about the structure. I believe we added a clause for "what if we get acquired before a priced round" which he wanted, and we felt fine to oblige!
Glad it all worked out! I didn’t realize how old the post was when I initially replied but then left it in case anyone needs the same info in the future. 😃