Andrew Rubin

SAFE Note as part of equity offer at startup -- anybody have experience?

I am close to accepting a leadership role at a startup that I have been consulting for over the last few years. Part of their offer is 3% equity (straight ownership, no stocks or options).

They want to issue me a SAFE note.

SAFE notes are much more common these days for investors. I am less familiar with them when it comes to SAFE notes being offered to employees as part of the equity component.

Does anybody have experience with being offered a SAFE note to represent your equity in a company?

Thank you!

🤝 Interviewing/Offer

16 comments

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lowhangersalesbanger

Executive

Account Executive

Hold on I have to google what a SAFE note is

poweredbycaffeine

WR Lieutenant

☕️

Was hoping for a little explainer.

Yup. One of those annoyingly niche things. A Google search won't get me out of this curiosity. Leveraging the awesome talent here at Bravado to see if anyone has a bit of experience with this specific thing. Otherwise, consulting a tech startup attorney on Wednesday who deals with this s**** all day every day. I'll post findings on this thread in case anyone in the future looks for an answer to a similar question.

Sunbunny31

Politicker

Sr Sales Executive 🐰

Thank you! Eager to learn more, to be honest.

Gasty

Notable Contributor

War Room Community Manager

Hey, welcome to the War Room!

I am Gasty, the WR community manager here. Just a couple of things I wanted to mention a couple of things before I get to your question.

This is an anonymous sales platform with some of the best sales people anyone has to offer. Their advice is pure gold. Being anonymous will get you the most out of this platform.

Keep posting, engaging with other posts, and you'll gain so much value, I assure you.

Also, this isn't LinkedIn, you can go as detailed as you want, no need to keep it short. Just focus on adding value.

Lastly, have you checked out the commission store yet? If not, I highly recommend. Earning commission is also super easy, upvotes get you commission points.

Once again, welcome and I’d suggest like others have, not really sure about the safe note being offered, I think getting a legal consultation would be the best way to go. Which you’re already considering. So beat of luck, would love to learn more though.

poweredbycaffeine

WR Lieutenant

☕️

Are they asking you to put in money to get that equity at a later date? That would be…strange.

Or are they trying to offer you 3% but only in the event of a liquidation event. If you leave, then you leave with nothing no matter what.

No investment from my end.

3% which is actionable in the case of certain triggering events... such as an acquisition, merger, a round of funding, etc.

The earning rate is 33% each year, so takes 3 years to fully vest.

If I leave, I retain the equity.

But again, just because I am not familiar with SAFE notes in this specific context, and more familiar with K1s, RSUs, etc, I wanted to see if anybody has experience with SAFE notes for equity issuance.

Thanks!

Justatitle

Big Shot

Account Executive

SAFE note, I thought those charges were dropped???
On a serious note, have a lawyer look at it. The 300 it’ll cost you for legal counsel will be worth far more than that to you potentially

Kosta_Konfucius

Politicker

ERP Sales

This might be a situation where you get a lawyer involved
When its over your head and serious, might make sense to get a 2nd opinion outside of an anonymous forum

MRK47

Personal Narrative

Head of Growth

Agree with suggestion to invest a few hundred $s for a lawyer to review - seems strange to be offered a SAFE Note but with no investment required from your side...and there could be a multitude of conditions in place (criteria of a change event, any dilution protection and what remedy if no change event & note never converts...)

Phillip_J_Fry

Opinionated

Director of Revenue

Probably something that you should run by an accountant. I think they'd have more insight into the financial ramifications.

jefe

Arsonist

🍁

I only know about safe words, not safe notes

-2

Sales executive

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jefe

Arsonist

🍁

@Gasty this guy is still around.

Can we take the trash out pls?

Gasty

Notable Contributor

War Room Community Manager

On it :)

jefe

Arsonist

🍁

Gracias, G!