Updated February 22, 2023:
All versions of the model form Safe for LLCs are available at JDForm, including the:
- Post-money Safe for LLCs with valuation cap (short form);
- Post-money Safe with discount (short form); and
- Pre-money long-form Safe with optional discount and valuation cap (original).
The Safe for LLCs is the first Safe specifically designed for limited liability companies classified under U.S. federal tax law as partnerships or disregarded entities. Do not use the Safe for LLCs for any entity classified as a S Corporation.
Why would’t you just build this into the LLC’s operating agreement?
I suppose you could attach it as an exhibit, but it would be time consuming and probably awkward to include the full SAFE in the LLC agreement. The SAFE is designed to speed up financings and that process would likely slow things down and increase complexity.
Can you envision a scenario where interest is paid to the SAFE investor?
It could be done, but then why not use a convertible note? The basic premise of the SAFE is that it is a convertible note without interest and without a maturity date.
Do you have a version for an LLC with a Cap and a Discount?
Yes, please visit http://www.jdform.com for all of the available Safes for LLCs as well as other legal forms.
Is this only applicable if the LLC is Delaware-based?
This is designed for a Delaware LLC but could be adapted for use in other states in consultation with legal counsel.
As of Feb. 2023, there are three versions, (i) a pre-money long-form version that includes an optional cap and/or discount, (ii) a post-money short form with a cap only, and (iii) post-money short form with a discount only.