Glossary
SAFE
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Glossary
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An accelerator is a fixed-term, cohort-based program that invests a small amount in early-stage startups in exchange for equity, then runs intensive mentorship that ends with a demo day.
A cap table (capitalization table) is the spreadsheet that tracks who owns what in your company: founders, employees, investors, and option holders.
Demo day is the public showcase at the end of an accelerator program, where each cohort company pitches investors over a compressed window. Usually a single afternoon of three-to-five-minute presentations.
A vesting cliff is the minimum period an employee or founder must stay at a company before any of their equity grant becomes vested. Usually one year, after which the cliff portion vests at once.
A SAFE (Simple Agreement for Future Equity) is a contract that lets an investor convert their cash into equity at a future priced round, without setting a valuation today. Y Combinator introduced the SAFE in 2013 to replace convertible notes with something simpler: no interest, no maturity date.
When you sign a SAFE, the investor wires money in exchange for a promise. At your next priced equity round (typically a Series Seed or Series A), the SAFE converts into shares. The conversion price is set by either a valuation cap, a discount, or both.
Stacking many SAFEs at different caps can cause more dilution than founders expect at conversion. Model the cap table at conversion before signing additional SAFEs.