Wayne Michigan Term Sheet — Simple Agreement for Future Equity (SAFE) is a legal document that outlines the terms and conditions for an investment in a startup company located in Wayne, Michigan. This agreement is a popular alternative to traditional equity financing and provides flexibility for both the investor and the entrepreneur. The Wayne Michigan Term Sheet — Simple Agreement for Future Equity (SAFE) serves as a foundational document during the early stages of fundraising. It lays out the terms of the investment, including the valuation cap, discount rate, and conversion rights. The SAFE agreement allows investors to provide capital to startups without having to determine the exact value of the company at the time of investment. There are different types of Wayne Michigan Term Sheet — Simple Agreement for Future Equity (SAFE) used in the startup ecosystem, including: 1. Valuation Cap SAFE: This type of SAFE agreement sets a maximum value at which the investor's investment can convert into equity. It protects the investor from potential overvaluation of the company in subsequent funding rounds. 2. Discount Rate SAFE: A Discount Rate SAFE offers investors the opportunity to convert their investment into equity at a predetermined discount rate compared to the valuation in the subsequent financing round. This provides investors with an advantage when the company's valuation increases. 3. Most Favored Nation (MFN) SAFE: The MFN SAFE agreement ensures that if the startup issues Safes to subsequent investors with more favorable terms (such as a lower valuation cap or higher discount rate), the previous SAFE investors automatically receive those more favorable terms. 4. Pro Rata Rights SAFE: This type of SAFE grants investors the right to maintain their ownership percentage in future financing rounds. It allows them to invest additional funds to keep their ownership stake constant. Key terms addressed in the Wayne Michigan Term Sheet — Simple Agreement for Future Equity (SAFE) may include the investment amount, conversion trigger events, conversion ratio, liquidation preference, voting rights, information rights, and anti-dilution provisions. It is crucial for both startups and investors to seek legal advice when utilizing the Wayne Michigan Term Sheet — Simple Agreement for Future Equity (SAFE) to protect their interests and ensure compliance with state and federal laws.