What is a token purchase agreement?

A token purchase is an investment transaction, typically activated by an initial coin offering (ICO), the cryptocurrency's version of an initial public offering, or IPO. Token purchases are a vehicle for cryptocurrency companies to raise many through accredited investors.

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Simple Agreement for Future Equity

San Diego California Simple Agreement for Future Equity

Name: San Diego California Simple Agreement for Future Equity
Brand: US Legal Forms
Rating: 4.69 (378 reviews)

Category:

Corporations - Startup - Venture Financing Process

State:

Multi-State

County:

San Diego

Control #:

US-ENTREP-008-4

Format:

Instant download

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.

How to fill out San Diego California Simple Agreement For Future Equity?

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FAQ

Is a convertible note debt or equity? Convertible notes are originally structured as debt investments, but have a provision that allows the principal plus accrued interest to convert into an equity investment at a later date. This means they are essentially a hybrid of debt and equity.

A simple agreement for future equity (SAFE) is a financing contract that may be used by a startup company to raise capital in its seed financing rounds. The instrument is viewed by some as a more founder-friendly alternative to convertible notes.

Entrepreneurs have a myriad of options for raising capital for their early-stage businesses including bootstrapping, crowdfunding, issuance of common stock, and issuance of convertible notes. Among these options is the Simple Agreement for Future Equity (SAFE).

A simple agreement for future equity (SAFE) is an agreement between an investor and a company that provides rights to the investor for future equity in the company similar to a warrant, except without determining a specific price per share at the time of the initial investment.

SAFE agreements are neither debt nor equity. Instead, they're the contractual rights to future equity. These rights are in exchange for early capital contributions invested into the startup. SAFE agreements allow investors to convert investments into equity during a priced round at some future point.

A token purchase is an investment transaction, typically activated by an initial coin offering (ICO), the cryptocurrency's version of an initial public offering, or IPO. Token purchases are a vehicle for cryptocurrency companies to raise many through accredited investors.

What Is a Simple Agreement for Future Tokens (SAFT)? A simple agreement for future tokens (SAFT) is an investment contract offered by cryptocurrency developers to accredited investors. Because SAFTs are considered securities, these tokens must comply with securities regulations.

A SAFT is a cryptocurrency investment contract between two parties. How it works: A blockchain startup agrees to launch a blockchain-based project that involves some kind of token. In exchange for funding right now, the startup enters into an agreement with investors to provide them with new tokens after launch.

These agreements are made between a company and an investor and create potential future equity in the company for the investor in exchange for immediate cash to the company. The SAFE converts to equity at a later round of financing but only if a particular triggering event (outlined in the agreement) takes place.

A KISS agreement (which is a Keep It Simple Security), is a simplified investment structure that is similar to a convertible note, which gets capital into your company much faster than more conventional methods.

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SAFE: SAFE that stands for "simple agreement for future equity". At its core, a SAFE is a warrant to purchase stock in a future priced round.A SAFE is an agreement that can be used between a company and an investor. The investors, invest money in the company using a SAFE. On the other hand, a SAFE can be interpreted as current equity even though it technically becomes a different class of equity in the future. Simple Agreement for Future Equity gives you the possibility to convert an investment into equity in the future, provided a trigger event occurs. Second, defined terms used herein are explicitly defined in the limited partnership agreement. Locking up certain important documents and valuables in a bank vault could turn into a headache for you or your heirs. Go car-free with the world's largest shared electric vehicle company. Lime is on a mission to build a future where transportation is shared, affordable…

San Diego California Simple Agreement for Future Equity

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Interesting Questions

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