Commercial & Tech
SAFE Notes for Startups
Preparing and reviewing SAFE agreements and funding rounds (Seed and Series A/B) for startups in Saudi Arabia.
Overview & Legal Definition
A Simple Agreement for Future Equity (SAFE) is a common early-stage financing instrument for startups, granting the investor the right to future equity without an immediate company valuation.
Points Requiring Careful Review
- 1Valuation cap and discount rate, and their impact on the investor’s ownership percentage upon conversion into actual equity.
- 2Triggering conversion events: a subsequent financing round, a company sale, or liquidation.
- 3Investor rights before conversion: whether the investor holds voting rights or information access.
- 4Alignment with Saudi company law, as the implementation mechanism differs from the U.S. market where the instrument originated.
SAFE Agreement & Valuation Risks
- Failure to define the Valuation Cap precisely, leading to excessive dilution of founders' shares.
- Violating Saudi Companies Law requirements when converting the SAFE note into actual equity.
- Ambiguity in exit terms and liquidation preference for the investor if the startup is liquidated.
Our Services
Drafting SAFE agreements aligned with the Saudi legal system.
Negotiating on behalf of founders or investors regarding valuation caps and conversion terms.
Structuring funding rounds (Seed and Series A/B) in coordination with existing shareholders’ agreements.
Related Network Contracts
Frequently Asked Questions
Our Standards
Licensed Firm
Formally licensed by the Ministry of Justice under License No. 48189.
Banking Pedigree
Led by a former Vice President of Riyad Bank's Legal & Compliance division.
PDPL Compliance
Full alignment with Saudi Personal Data Protection Law regarding communications.
Related Legal Services
حجز استشارة
اطلب استشارة قانونية
املأ النموذج المرفق وأرفق المستندات المطلوبة، وسيقوم فريقنا بدراسة الطلب والتواصل معكم خلال 24 ساعة.