SAFE Agreement
Money in now, shares later, when a priced round sets the value.
A Simple Agreement for Future Equity: an investor gives a company cash now in exchange for the right to receive shares later, typically when the company raises a priced financing round. Unlike a loan, a SAFE carries no interest and no maturity date, which is why it has become a common way for Canadian pre-seed and seed-stage companies to raise money quickly without negotiating a full valuation.
- Business days
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- Lawyer reviewed
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- Surprise bills
- $0Surprise bills
What a SAFE Agreement should include
Investment amount — what is being invested, and when it is paid.
Valuation cap — the ceiling on the valuation at which the investment converts.
Discount — any reduction to the price new investors pay, and how it interacts with the cap.
Conversion triggers — the events that turn the instrument into shares.
Most favoured nation — whether this investor gets the benefit of better terms given later.
Treatment on a sale — what the investor receives if the company is acquired before conversion.
When you need one
For pre-seed and seed money you want to close quickly without setting a valuation. A SAFE has no maturity date and pays no interest, which is what makes it faster and cheaper to close than a priced round — and what makes it a poorer fit for an investor who wants debt-like protection.
How Ruby drafts it
Tell us what you need
Describe the agreement, your business context, and how fast you need it. A few smart questions, not a legal questionnaire. Your price and turnaround are confirmed before anything starts.
Ruby drafts it
Once pricing is confirmed a qualified Ruby lawyer is assigned to your file, and the first draft is built from your answers and real Canadian statute.
A licensed lawyer reviews every line
A lawyer licensed in Canada reviews and finalizes the document before it reaches you, and writes the plain-language summary that comes with it.
Signed, stored, and yours to revisit
You get the final agreement and its summary, stored so you can come back to it rather than hunting through email for the current version.
The fee is set before any of that starts. Hourly billing moves as scope does; a flat fee is one number, confirmed in writing, that doesn’t change after the work is done. See how Ruby prices agreements.
Or did you mean one of these?
These get confused with a SAFE Agreement often enough to be worth ruling out before you buy the wrong document.
Questions people ask
It is where most problems on Canadian SAFEs start. The prospectus-exemption analysis is different here, and the choice of instrument can bear on Canadian-controlled private corporation status and on SR&ED eligibility. Ruby drafts these on Canadian paper for that reason.
A cap sets a maximum valuation for conversion. A discount gives a percentage off whatever the new round's price turns out to be. Some SAFEs have one, some have both, and where both apply the investor usually gets whichever is better for them.
That depends on the cap, the discount and the size of the round it converts into, which is why it is worth calculating before signing rather than after. Ruby's free SAFE dilution calculator does the post-money arithmetic.
Looking for the plain definition rather than the document? See SAFE Agreement in the Ruby legal glossary.
This page is general information about Canadian business law and is not legal advice. Laws differ by province and change over time, and how they apply depends on your circumstances. For advice on your situation, speak with a lawyer licensed in your province.
Need a SAFE Agreement?
Ruby drafts it for a flat $799 CAD, confirmed before any work begins, with a licensed Canadian lawyer on every document.