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Another new function of the safe concerns a “prorgula” right. The original safe required the company to allow holders of safes to participate in the financing round after the financing round in which the safe was converted (for example. B if the safe is converted into series group preferred actuators, a secure holder – now holder of a Series A preferred share subseries – is allowed to acquire a proportionate portion of the Series B preferred share). While this concept is consistent with the original concept of safe, it made no sense in a world where safes were becoming independent funding cycles. Thus, the “old” pro-rata right is removed from the new safe, but we have a new model letter (optional) that offers the investor a proportional right in the preferential financing of Series A on the basis of the converted safe property of the investor, which is now much more transparent. Whether a start-up and an investor enter the letter with a safe will now be a choice that the parties will choose, and this may depend on a large number of factors. Factors to consider can (among other things) the amount of the safe purchase and the amount of future dilution that proportional duty can cause to the founders – an amount that can now be predicted with much greater accuracy if post-money safes are used. It`s the flesh of the document. Sponsor rights mean that an investor can retain his or her share of ownership. If they buy 10% (regardless of the final calculation method), it is in this financing cycle, if they are diluted by the serial investor and the new increase in ESOP, when they can invest more money and keep the diluted possession at 10%. The investor cannot sell his proportional rights to someone without your permission. However, they can move rights under their corporate structure and between directors.

So when we say that Jim is a partner who made the deal, but he stops and Mary takes over, she can still control the investment. This agreement (this “agreement”) is concluded on or around [the date of the guarantee] in connection with the purchase of this specific simple agreement for future capital with a “post-money valuation cap” (the “Investor`s Safe”) issued by [the name of the company] (the “company”) on the day or beyond the date of that agreement.

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