Oklahoma Simple Agreement for Future Equity

• Category: Corporations - Startup - Venture Financing Process
• State: Multi-State
• Control #: US-ENTREP-008-4
• Format: Word; Rich Text

Description

This term sheet summarizes the principal terms of the proposed Simple Agreement for Future Equity ("SAFE") financing of a Company, by certain Investors. This term sheet is for discussion purposes, is not binding on an Investor, nor is an Investor obligated to consummate the financing until a definitive SAFE agreement has been agreed to and executed. The term sheet does not constitute an offer to sell or an offer to purchase securities. The term "Oklahoma Simple Agreement for Future Equity" refers to a contract commonly used by startups and early-stage companies in Oklahoma to raise funds from investors in exchange for future equity. It is an investment vehicle that allows entrepreneurs to secure capital while delaying the establishment of the company's valuation until a later funding round or exit event. The Oklahoma Simple Agreement for Future Equity, also known as an Oklahoma SAFE, operates similarly to its national counterpart, the Simple Agreement for Future Equity (SAFE) developed by Y Combinator. However, the Oklahoma version is tailored to comply with the state's specific laws and regulations. Under an Oklahoma SAFE, an investor provides funds to a company with the expectation of receiving equity in the event of a qualifying future financing or liquidity event. This agreement allows startups to avoid setting an immediate valuation, which can often be complex and challenging for early-stage companies with limited operating history. There are different types of Oklahoma SAFE agreements, such as: 1. pre-Roman SAFE: In this type of agreement, the investment is made prior to the company receiving any subsequent external funding. The equity allocation is determined after the next financing round, and the investor typically benefits from a lower share price due to the earlier investment. 2. Post-Money SAFE: This variant involves investing in the company after it has secured external funding. The equity allocation is determined based on the total value of the company after the latest funding round. Investors in a post-money SAFE generally receive a higher share price, reflecting the dilution caused by the external investment. 3. Valuation Cap SAFE: This type of SAFE sets a maximum predetermined valuation for the company upon conversion into equity. It provides investors with the potential of acquiring equity at a capped valuation, thus protecting their percentage ownership in the event of a significant increase in the company's valuation. 4. Discount SAFE: A Discount SAFE offers investors the opportunity to purchase equity at a discounted price compared to the price offered to subsequent investors in a future funding round. This feature allows early investors to acquire a larger share of the company. Investors and startups in Oklahoma can leverage these different types of SAFE agreements to structure funding rounds that align with their unique fundraising needs and strategies. By utilizing an Oklahoma SAFE, entrepreneurs can attract capital from investors interested in supporting the growth and success of early-stage companies without immediately establishing a valuation.

The term "Oklahoma Simple Agreement for Future Equity" refers to a contract commonly used by startups and early-stage companies in Oklahoma to raise funds from investors in exchange for future equity. It is an investment vehicle that allows entrepreneurs to secure capital while delaying the establishment of the company's valuation until a later funding round or exit event. The Oklahoma Simple Agreement for Future Equity, also known as an Oklahoma SAFE, operates similarly to its national counterpart, the Simple Agreement for Future Equity (SAFE) developed by Y Combinator. However, the Oklahoma version is tailored to comply with the state's specific laws and regulations. Under an Oklahoma SAFE, an investor provides funds to a company with the expectation of receiving equity in the event of a qualifying future financing or liquidity event. This agreement allows startups to avoid setting an immediate valuation, which can often be complex and challenging for early-stage companies with limited operating history. There are different types of Oklahoma SAFE agreements, such as: 1. pre-Roman SAFE: In this type of agreement, the investment is made prior to the company receiving any subsequent external funding. The equity allocation is determined after the next financing round, and the investor typically benefits from a lower share price due to the earlier investment. 2. Post-Money SAFE: This variant involves investing in the company after it has secured external funding. The equity allocation is determined based on the total value of the company after the latest funding round. Investors in a post-money SAFE generally receive a higher share price, reflecting the dilution caused by the external investment. 3. Valuation Cap SAFE: This type of SAFE sets a maximum predetermined valuation for the company upon conversion into equity. It provides investors with the potential of acquiring equity at a capped valuation, thus protecting their percentage ownership in the event of a significant increase in the company's valuation. 4. Discount SAFE: A Discount SAFE offers investors the opportunity to purchase equity at a discounted price compared to the price offered to subsequent investors in a future funding round. This feature allows early investors to acquire a larger share of the company. Investors and startups in Oklahoma can leverage these different types of SAFE agreements to structure funding rounds that align with their unique fundraising needs and strategies. By utilizing an Oklahoma SAFE, entrepreneurs can attract capital from investors interested in supporting the growth and success of early-stage companies without immediately establishing a valuation.