What makes everybody so positive SAFE rounds are founder-friendly?

SAFEs, easy agreements for future fairness, have lengthy been touted as a founder-friendly construction for signing enterprise offers. However is it actually truthful to name them that?

TechCrunch+ not too long ago surveyed a handful of VCs and founders about how they’re feeling about SAFE rounds on this more durable fundraising market, particularly now that energy has largely shifted again to traders. We discovered that whereas each teams championed the deal construction on the earliest levels and for capital raises in between formal rounds, founders appeared much less enthused about SAFEs total.

Isn’t it a bit odd to be hesitant about one thing that’s supposedly good for you?

The SAFE construction can undoubtedly be useful to founders. A SAFE with no valuation cap permits founders to have considerably extra management over value, it’s faster to shut when you want money quick, and, hey, it prices much less in authorized charges.

However there are some things about this deal construction that give me pause. Is a mannequin that’s quicker and comes with much less authorized oversight actually higher for founders who could also be taking over cash for the primary or second time, in comparison with a VC who seems to be at offers all day? Certainly, there are a number of drawbacks to SAFE rounds that may chew founders down the road.