Jeremy Halpern, the director of business development for Nutter's Emerging Companies practice group, published "SAFEs On The East Coast" on the VentureFizz blog on December 4. The article provides an overview of Simple Agreements for Future Equity or "SAFEs" and discusses the advantages, challenges and innovations of this financing mechanism developed on the West Coast which has become more popular in the greater Boston area in lieu of traditional convertible notes. SAFEs have been used to shorten transaction timing, reduce the costs of offerings, and get companies back to execution rather than financing.
Jeremy notes that SAFEs provide an attractive way for companies and issuers to defer valuation negotiations and to provide early investors with equity returns, without creating the debt/equity hybrid that is economically and structurally confusing. He opines that in the months and years ahead more savvy entrepreneurs and early stage investors will seriously consider these instruments as the way to fund the next wave of amazing, high growth companies.
To view the article, click here.
Originally published by VentureFizz.
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