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Home Q&A Forum When to use a SAFE Note?

Investments

SAFE Note

Connecticut

Asked on Aug 10, 2023

When to use a SAFE Note?

I am a small business owner looking to raise funds for my business. I have been exploring different financing options, and I have recently come across SAFE Notes. I'm not sure when to use a SAFE Note, and how it could benefit my business. I am hoping to learn more about how SAFE Notes work and when they should be used.

1 Attorney answer

Answer

Investments

Connecticut

Answered 337 days ago

Thomas L.

ContractsCounsel verified

Business Lawyer
Licensed in Connecticut
Free Consultation

SAFEs are used by growth capital technology startups who are planning to sell multiple rounds of preferred stock to investors. A SAFE is a stock warrant, meaning, the pre-purchase of a later issuance of stock. If you are planning to sell multiple rounds of preferred stock to investors, then a SAFE is a quick way to raise smaller amounts of capital in advance of selling a big preferred stock round.

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