Please see my blogs (Medium, and Steemit) for detailed explanations.
I created a special fundraising document (Github, Google Docs) to accommodate both traditional investors who prefer equity financing (e.g. including equity pre-sale, such as YC's SAFE), and progressive crypto investors who may prefer token sales / ICOs. The result enables investors to take advantage of not only the liquidity offered by ICO / token sales (if the company offers one in the future), but also the benefit of equity appreciation and legal protection in traditional equity financing. I asked an attorney to review and revise this document, and I have raised money from multiple investors based on this document.
I have made this agreement public on Github and Google Docs. I hope this could help other crypto startups and investors. I summarized the highlights of my document in my blog (Medium, and Steemit), and compared this agaisnt YC's SAFE, Protocol.ai’s SAFT, and Colony.io’s SAFTE. In my blogs, I also explained the benefits of using this document for both investors and startups, and why I did this.. Please find more details in my blogs.
I hope this helps, but if you decide to use this document, please also consult with your own lawyers. I do not assume any responsibility or consequence for using this document.
I based my SAFTE document on:
- Y Combinator’s SAFE (Simple Agreement for Future Equity), an equity “pre-sale” agreement which is one of the most popular traditional fundraising instruments for early-stage startups.
- Protocol.ai’s SAFT (Simple Agreement for Future Tokens), a token-sale agreement that gives discount to pre-sale investors. This is a “pure crypto” agreement, which not uncommon among crypto startups, but the downside is this agreement does not offer any equity to investors.
- Colony.io’s SAFTE (Simple Agreement for Future Tokens or Equity) by Jack du Rose, an agreement that offers investors either tokens in the future, or equity in the future, whichever happens first, but not both. Additionally, investors are not offered with the flexibility to convert equity into tokens. Moreover, the agreement is incompatible with a valuation cap.
I also borrowed some languages in section 1(a) from the SAFE-t agreement by CoinAlpha, whose co-founders generously shared their fundraising documents with me. Please check out their blogs and platform if you are interested in cryptocurrency hedge fund.