The SAFE Note Explained: Fundraising Without Lawyers
A SAFE is not debt. It is not equity. It is a promise: "I give you cash now, you give me shares later when you do a big round." It is fast and cheap.
What is Valuation Cap?
Valuation Cap is The most important number. It sets the maximum price the investor pays per share in the future.
The 3 Core Benefits
Speed
No negotiation on 50 terms. Only negotiate 1 term: The Valuation Cap. You can close a deal in 1 emails.
Cost
Lawyers charge $20k for equity rounds. SAFEs are free (Open Source from Y Combinator). Spend that $20k on engineers.
Rolling Close
You don't need to round up all investors at once. You can take a $25k check today, and another $50k next week. It keeps cash flowing.
How to Issue a SAFE
Download the Template
Go to YC website. Download "Post-Money SAFE" (Valuation Cap only). Don't edit the legal text. Investors trust the standard.
Fill in the Cap
Set your Cap. (Standard for US Seed is $5M - $15M depending on traction). Don't set it too low (Dilution) or too high (Greed).
Sign and Wire
Send PDF via DocuSign. Investor signs. Investor wires money. You send receipt. Done. No board approval needed (usually).
Track the Cap Table
Use distinct tools like Pulley or Carta. Even though they aren't shares yet, you need to track how much of the company you "promised" away.
Mesh Network Fundraising
Founders on Mesh understand SAFEs. If you meet an angel investor on the platform, sharing a standard SAFE link is expected and professional.
Priced Equity Round vs. SAFE Note
| Feature | Priced Equity Round | SAFE Note |
|---|---|---|
| Legal Fees | $20,000+ | $0 |
| Time | 3 Months | 3 Days |
| Complexity | High | Low |
Frequently Asked Questions
What happens if I fail?
SAFE holders lose their money. They are not lenders. They cannot sue you for repayment (unlike Convertible Notes with Maturity dates).
What is a "Discount"?
An extra sweetener. "20% Discount" means they buy shares at 20% off the next round price. Usually you do Cap OR Discount, not both.
Post-money vs Pre-money?
Always use Post-Money. It allows you (and investors) to calculate ownership exactly. Pre-money is confusing and outdated.
What makes a launch channel high intent?
High-intent channels have users actively searching for solutions, not just browsing a feed.
How many channels should I launch on?
Start with 3-5 strong channels, measure conversions, then expand to 10-12 over time.
How do I avoid launch fatigue?
Stagger your launches and reuse assets so each channel gets a focused push.
What should I measure after launch?
Track qualified signups, backlinks, and demo requests, not just raw traffic.
How does Mesh of Growth fit with other platforms?
Use Mesh for compounding reviews and backlinks while other platforms provide short-term spikes.
Ready to get instant traffic from trusted founders?
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