Valtech’s valuation team has recently completed market value assessments on SAFE arrangement for leading next-generation ventures from different industries.

In the recent decade, SAFE agreements (Simple Agreement for Future Equity) have received popularity among startup companies to raise capital in its seed and early stages (Series A and B), due to its favourable and flexible features offered to immediate investors.

A SAFE agreement gives the investor a right to convert into equity on future significant rounds. Unlike typical convertible bonds (CB), SAFE’s conversion prices are set to the investor’s advantage by simultaneously allowing price discounts to next funding round and price caps. As such, a SAFE investor can typically enjoy a lower conversion price than a CB or preference share investors, kept all else factors equal.

When valuing a SAFE agreement, lattice model, allocation and simulation methods might be adopted in combination with the traditional methods. Valtech’s team is well qualified and experienced to handle all valuation scenarios.