{"id":220833,"date":"2023-02-15T15:40:47","date_gmt":"2023-02-15T02:40:47","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=220833"},"modified":"2024-11-27T16:11:17","modified_gmt":"2024-11-27T03:11:17","slug":"safe-converts-nz","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/capital-raising\/safe-converts-nz\/","title":{"rendered":"What Happens When a SAFE Converts in NZ?"},"content":{"rendered":"\n

A simple agreement for future equity (SAFE) is a contract between an investor and a business that allows an investor to provide cash to a business without receiving equity immediately. Instead, the investor will receive equity at a future point, typically when the business undergoes a priced equity round, at which time it is able to be valued. A SAFE \u2018converts\u2019 when the investor receives equity in exchange for cash. This article will explain how the SAFE conversion process works and in what situations a SAFE will convert.<\/p>\n\n\n\n

Why Do Businesses Utilise SAFE Agreements?<\/h2>\n\n\n\n

Businesses utilise SAFE agreements to raise capital<\/a>. Startups need to raise capital so they can grow their business. There are many ways a business can raise capital. Each method comes with its unique set of advantages and disadvantages.\u00a0<\/p>\n\n\n\n

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NZ Cap Table Template<\/div>\n
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Capital raising is a critical time for any startup. Take control of your startup’s equity with this free cap table template. It will also allow you to analyse and compare financing rounds to make the best capital raising decisions.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n

What Makes a SAFE Agreement Unique?<\/h2>\n\n\n\n

A SAFE agreement is unique as it allows a business to wait before providing equity for any capital that an investor has injected into the company. Its uniqueness stems from the fact that an investor will receive an accurate share of the company due to equity only being received at a future point, such as when a later round of funding occurs. <\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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