ContractsCounsel Logo

SAFE Agreement Cost

Updated: August 11, 2023
Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 10,572 reviews
No Upfront Payment Required, Pay Only If You Hire.
Home Blog SAFE Agreement Cost

Jump to Section

What does a SAFE agreement cost? If you own a start-up company and seek capital for your new business, you may ask this question. Let’s explore this question and review some general information about SAFE agreements and how they work.

How Much Does a SAFE Agreement Cost?

A SAFE agreement, an abbreviation for “simple agreement for future equity,” is a legally binding contract in which an investor makes a cash payment to a company in return for the right to turn the amount invested into stock in the company if a predetermined trigger event occurs.

SAFE agreements are not traditional loans and are considered more of a contract than a loan. Therefore, unlike a convertible note that abides by maturity dates and interest rates, a SAFE agreement often does not have these features.

This note is very popular with new startup companies that need to secure investors. Still, due to their age, there needs to be more financial data to assign value to the company.

When using a SAFE agreement, a company can postpone the valuation until a later date when more data is available. In addition, SAFE agreements are more straightforward than other funding options. They protect startup companies and investors by covering potential future events like changes in control, company dissolution, and bankruptcy.

Startup companies understand the importance of SAFE agreements, so it is common for these businesses to hire an attorney to draft the SAFE agreement to ensure they are written correctly and include all necessary information.

Based on ContractsCounsel’s marketplace data, the average cost of a project involving a SAFE agreement is $519.24.

What’s Included in a SAFE Agreement?

SAFE agreements tend to be simple contracts and are usually less than five pages in length. As a result, the terms and conditions are fairly simple to understand. Still, the following five provisions must be included in a SAFE agreement.

  • Discounts. It is common for a SAFE agreement to feature a discount on the investor’s future converted equity. Discounts are typically 10%-30%. Investors can purchase shares at a discount in the future.
  • Valuation caps. A valuation cap establishes the highest conversion price. This allows early investors to purchase shares that are less expensive than new investors.
  • Most-favored nation provisions. The first investor must be notified of all subsequent investors. Suppose the first investor believes that a newer investor benefits from favorable terms. In that case, they can ask for those terms to be applied to their SAFE agreement.
  • Pro-rata rights. Also called participation rights, these rights allow investors to invest extra funds to keep their ownership percentage during a future equity financing.

Types of SAFE Agreement

There are three different types of SAFE agreements to choose from. Each has different options and provisions that will affect the investor and conversion.

  • Valuation cap, no discount. The most used safe agreement option allows investors to convert their SAFE agreement lower than the priced valuation cap.
  • Discount, no valuation cap. This SAFE agreement allows investors to convert their notes into shares at a discounted rate.
  • Most favored nation no valuation cap, no discount. When using this type of SAFE agreement, investors can adapt new terms for their contract if they believe newer investors benefit from better terms.

An experienced attorney can help you choose which SAFE agreement is best for the company and the investor.

Meet some lawyers on our platform

Jeremiah C.

96 projects on CC
CC verified
View Profile

Forest H.

199 projects on CC
CC verified
View Profile

Danny J.

7 projects on CC
CC verified
View Profile

Zachary J.

345 projects on CC
CC verified
View Profile

Examples of SAFE Agreement Projects

SAFE Agreement Drafting Services

SAFE agreements are important financial contracts that could control a large sum of money and a company's future. Therefore, both investors and companies need to be sure that this agreement is drafted correctly, protects the interests of both parties, and is legally binding.

It is recommended that companies hire an attorney to draft this agreement. A contract lawyer experienced with drafting SAFE agreements will meet with the company owner to learn about the company and its finances.

The lawyer can help the company choose which SAFE agreement will work best for its goals, then draft a legally binding contract that the company can present to investors.

SAFE Agreement Review Services

SAFE agreements are relatively simple contracts, so sometimes, a company may draft its SAFE agreement using a standard template. While this is possible, it is recommended that before executing a self-drafted contract with investors, the company hires a lawyer to review the contract.

A lawyer can review the agreement to ensure that it is free from mistakes that could put the business or the investor at risk. The lawyer can add or edit any missing provisions and advise whether the type of SAFE agreement drafted is the best choice for the company.

Hiring a lawyer to review a SAFE agreement is the only way to ensure that the contract is legally binding, adheres to laws pertaining to SAFE agreements, and protects all parties.

SAFE Agreement Drafting Cost

When a company hires an attorney to draft a SAFE agreement, it will incur legal fees. The time it takes the lawyer to draft the contract is usually the most significant factor in determining how much the project will cost.

ContractsCounsel’s marketplace data shows the average SAFE agreement drafting costs to be $540.27 across all states and industries.

SAFE Agreement Review Cost

Suppose a company hires a lawyer to review a SAFE agreement. In that case, they will still incur legal fees for the lawyer’s time and guidance, but it will typically be less than drafting fees.

ContractsCounsel’s marketplace data shows that the average SAFE agreement review costs are $478.22 across all states and industries.

How Do Lawyers Charge for SAFE Agreement?

The two most common fee agreement structures that lawyers charge for their time are hourly or flat fee rates.

Hourly Rates for SAFE Agreements

When a lawyer uses an hourly rate fee structure, they set an hourly rate for their time and then charge a client for each hour spent working on a project or case. The lawyer can also bill for any employee’s time spent on the project, like associate lawyers or paralegals.

ContractsCounsel’s marketplace data shows that the average hourly rate for a contract lawyer ranges from $200 - $350 per hour.

Flat Fee Rates for SAFE Agreements

When using a flat fee rate structure, instead of billing hourly, an attorney quotes the client a flat fee rate for the entire project. If the client agrees to the price, they will pay the lawyer up front, and the lawyer will complete the job.

It is important to note that flat fee rates usually only cover tasks like drafting documents or document reviews. The lawyer may charge more if the client wants consultations, legal advice, or ongoing representation.

ContractsCounsel’s marketplace data shows that the average flat fee rate for a SAFE agreement is $519.24.

Get Help with a SAFE Agreement

Do you need help with a SAFE agreement project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from business lawyers to handle your project. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.

Need help with a SAFE Agreement?

Create a free project posting

Meet some of our Lawyers

Michael O. on ContractsCounsel
View Michael
5.0 (4)
Member Since:
February 14, 2022

Michael O.

Managing Attorney
Free Consultation
Los Angeles
17 Yrs Experience
Licensed in CA, NY
University of Southern California

A corporate and commercial attorney with experience in transactional legal services including corporate and finance transactions, mergers and acquisitions, real estate, commercial contracts, bankruptcy, restructuring, international business transactions and general counsel services. Additional background skills and experience include investment banking, financial analysis, and commercial litigation. Sectors covered include technology, media, franchises, and business services providers, from start-ups to medium and large enterprises.

Christopher R. on ContractsCounsel
View Christopher
5.0 (11)
Member Since:
August 25, 2020

Christopher R.

Attorney
Free Consultation
Boston, MA
10 Yrs Experience
Licensed in MA, NH
Suffolk University Law School

Corporate and transactional attorney in sixth year of practice. Focus areas include general corporate counsel, labor and employment law, business partnership matters, securities matters related to privately-held companies, and regulatory compliance in securities and finance matters.

Garrett M. on ContractsCounsel
View Garrett
4.9 (5)
Member Since:
June 15, 2023

Garrett M.

Attorney
Free Consultation
Cincinnati, Ohio
4 Yrs Experience
Licensed in KY, OH
University of Cincinnati College of Law

Attorney Garrett Mayleben's practice is focused on representing small businesses and the working people that make them profitable. He represents companies in structuring and negotiating merger, acquisition, and real estate transactions; guides emerging companies through the startup phase; and consults with business owners on corporate governance matters. Garrett also practices in employment law, copyright and trademark law, and civil litigation. Though industry agnostic, Garrett has particular experience representing medical, dental, veterinary, and chiropractic practices in various business transactions, transitions, and the structuring of related management service organizations (MSOs).

Justin A. on ContractsCounsel
View Justin
5.0 (9)
Member Since:
July 7, 2021

Justin A.

Partner
Free Consultation
Seattle, WA
7 Yrs Experience
Licensed in NY, WA
The University of Chicago Law School

I am an entrepreneurial lawyer in the Seattle area dedicated to helping clients build and plan for the future. I earned my law degree from the University of Chicago and worked in a top global law firm. But I found advising real people on legal issues far more rewarding. Reach out to discuss how we can work together!

Max M. on ContractsCounsel
View Max
4.9 (20)
Member Since:
July 12, 2021

Max M.

Business Attorney
Free Consultation
Baltimore, Maryland
17 Yrs Experience
Licensed in MD
Georgetown University Law Center

Results oriented business attorney focusing on the health care sector. Formerly worked in Biglaw doing large multi-million dollar mergers and acquisitions, financing, and outside corporate counsel. I brought my skillset to the small firm market, provide the highest level of professionalism and sophistication to smaller and startup companies.

JOSEPH L. on ContractsCounsel
View JOSEPH
4.8 (16)
Member Since:
July 26, 2021

JOSEPH L.

Attorney
Free Consultation
Stratford, CT
41 Yrs Experience
Licensed in CT
Southwestern University School of Law

Mr. LaRocco's focus is business law, corporate structuring, and contracts. He has a depth of experience working with entrepreneurs and startups, including some small public companies. As a result of his business background, he has not only acted as general counsel to companies, but has also been on the board of directors of several and been a business advisor and strategist. Some clients and projects I have recently done work for include hospitality consulting companies, web development/marketing agency, a governmental contractor, e-commerce consumer goods companies, an online apps, a music file-sharing company, a company that licenses its photos and graphic images, a video editing company, several SaaS companies, a merchant processing/services company, a financial services software company that earned a licensing and marketing contract with Thomson Reuters, manufacturing companies, and a real estate software company.

Find the best lawyer for your project

Browse Lawyers Now

Need help with a SAFE Agreement?

Create a free project posting
CONTRACT LAWYERS BY TOP CITIES
See All Startup Lawyers
Learn About Contracts
See More Contracts
other helpful articles

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

Need help with a SAFE Agreement?

Create a free project posting

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city