SAFE, or Simple Agreement for Future Equity, is a standardized fundraising document
Meadow,a Y Combinator startup building software for California dispensaries, has launched an open-source fundraising document geared toward streamlining early-stage financing for cannabis businesses.
The SAFE, or Simple Agreement for Future Equity, is a standardized fundraising document that allows founders and investors to negotiate and enter into a financing agreement quickly, reducing the time and cost associated with fundraising.
It was first created by startup accelerator Y Combinator in 2013 and has been used by thousands of companies since. In collaboration with California legal teams, Meadow adapted Y Combinator’s original SAFE for the nuances of legal cannabis.
The tool has been customized for cannabis businesses and investors to address compliance with commercial cannabis investments. It takes into account the regulatory nuances of the legal cannabis industry.
The document features a mechanism that ensures investors and companies comply with state and local cannabis regulations, when and if required, and includes an investor acknowledgment that exempts the company from representing any compliance with certain cannabis laws such as federal law or Section 280E of the U.S. tax code.
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