Safe Term Sheet

I. Introduction

This SAFE Term Sheet outlines the principal terms and conditions proposed by [Investor Name] for an investment in [Your Company Name]. This document is intended to serve as a basis for further negotiation and documentation. The terms outlined herein are intended to ensure a mutual understanding and a smooth process toward final agreements.

II. Key Investment Terms

Below are the general terms under which [Investor Name] proposes to invest in [Your Company Name]:

• Amount of Investment: [Investment Amount]

• Valuation Cap: [Valuation Cap]

• Discount Rate: [Discount Rate] %

• Pro-Rata Rights: Yes/No (If "Yes", specify terms)

The investment will be made using a SAFE that converts into equity at the lower of the valuation cap or a discounted share price during a subsequent equity financing event, adjusted by any agreed discount rate.

III. Triggering Events

Triggering Events under this agreement are defined as follows:

• Equity Financing: Any sale of common or preferred stock [Specify preferred stock series if applicable] that provides [Your Company Name] with at least [Minimum Amount] in new funding.

• Liquidity Event: Any merger, sale, or other event that results in a change of control of [Your Company Name].

• Dissolution Event: Any voluntary termination, bankruptcy, or dissolution of [Your Company Name].

At each Triggering Event, except a Dissolution Event, the SAFE will convert into equity shares based on the conversion mechanisms specified above.

IV. Conversion Mechanics

The specifics of the conversion of the SAFE into equity following a Triggering Event include the following details:

• Initial conversion will be into the most senior class of stock issued in the Triggering Event.

• The conversion price per share will be determined by applying the Discount Rate to the price per share paid by the investors in the Triggering Event.

If no Triggering Event has occurred and [Your Company Name] raises additional funds through another form of investment, special provisions for conversion may apply based on agreements between [Your Company Name] and [Investor Name].

V. Miscellaneous

General terms about the governance of the SAFE and any additional provisions are as follows:

• Governing Law: This agreement will be governed by the laws of [State/Country].

• Expiration: The SAFE will expire and be no longer valid if not converted by [Expiration Date] unless extended by mutual agreement of the involved parties.

Both parties agree to conduct their dealings in good faith and to enter into definitive agreements that are consistent with the terms outlined in this Term Sheet following successful due diligence and corporate approvals.

[Investor Name]
[Date]

[Your Name]
[Your Company Name]
[Date]

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