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Fundraise with SAFEs

Learn how you can fundraise for your startup by creating, sending, and tracking SAFEs from your Dashboard.

After Atlas incorporates your C corp, you can begin fundraising. Atlas helps you gain board approval to fundraise, then lets you send Simple Agreements for Future Equity (SAFEs) to investors. After signing a SAFE, your investors can transfer funds to the bank account of your choice.

Atlas uses the Y Combinator-drafted template for post-money SAFEs with valuation caps, which is the most commonly used type of SAFE.

Obtaining board consent to fundraise

Before creating a SAFE, Atlas helps you obtain board consent to authorize fundraising using SAFEs:

  1. Set up fundraising. Navigate to the Fundraising tab in your Atlas Dashboard and click Begin fundraising.
  2. Enter the amount you plan to raise with SAFEs. Tell us the maximum amount you plan to raise using SAFEs. We’ll generate a board consent document that your board can sign to approve fundraising up to this amount. You won’t be able to issue SAFEs using Atlas beyond this amount without working with a lawyer to sign a new board consent. Read more about how much to fundraise.
  3. Obtain board consent. Click Next, so we can generate a pre-filled board consent document with your company details and maximum fundraising amount. Atlas board consent documents were drafted by Cooley, a leading law firm for startups.
  4. Confirm board members. Confirm the list of board members is accurate. Click Send for signature, and Atlas emails all board members using DocuSign to collect signatures.
  5. Sign board consent documents. After all board members have signed, your Dashboard shows that board consent is complete, and you can begin sending SAFEs.

Sending and signing a SAFE

After obtaining board approval, you’re ready to send SAFEs:

  1. Create a SAFE. Click Create SAFE in the Fundraising tab in your Atlas Dashboard.
  2. Enter investor information. Enter the investment amount and valuation cap, whether your investor is an individual or institution, and investor details. Because of SEC regulations, law firms recommend confirming investors are “accredited.” Read more about accredited investors .
  3. Confirm the Signer. This is the person authorized to fundraise on behalf of your company. The CEO is usually the signer.
  4. Send for Signatures. The SAFE is sent to both the investor and company signer using DocuSign. They each receive an email from “Stripe Atlas via Docusign” asking them to sign electronically. You receive an email from both Docusign and Atlas when both the investor and the company signer have signed the SAFE.

If you aren’t ready to send a SAFE, but want to create a draft, follow the above steps, click close (x) in the upper left corner before you Send for signature. You can then edit and send this draft from your Dashboard when you’re ready.

Receiving funds

You need to arrange with your investor to transfer the funds to your bank account. You’ll probably need to provide them with your bank details.

Atlas founders can open bank accounts at Brex and Mercury before their EIN arrives by going to Perks in their Atlas Dashboard, selecting Mercury or Brex, and following the prompts.

Definitions

Post-money SAFE

“Post-money” means the SAFE investor’s ownership is calculated as a percentage of the company after their SAFE and all other SAFEs at the time have converted. For example, if you raise a 500,000 USD SAFE on a 5 million USD post-money valuation, your investor owns 10% of the company after conversion.

Valuation cap

The valuation cap is the maximum company valuation at which the SAFE converts into equity in your company. If you raise money at a higher valuation than the valuation cap of a prior SAFE, the investor on that SAFE receives shares in your company as if the company were valued at the valuation cap rather than the new valuation. Their ownership is calculated as their investment divided by the valuation cap, rather than their investment divided by the new valuation. This is the most popular type of SAFE.

Accredited investor

An accredited investor is someone who meets the SEC definition based on their income, assets, or professional qualifications. See why Cooley recommends that you make sure your investors are accredited investors on their website.

See also

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