An investment contract popularized by Y Combinator where an investor provides capital in exchange for the right to equity at a later pricing event, rather than pricing the equity today.
Why it matters: SAFEs are the standard for early-stage fundraising because they are fast, cheap to execute (low legal fees), and avoid the difficult task of pricing a pre-revenue company.
In practice: A founder raises $500k on a SAFE with an $8M valuation cap. The investor doesn't get shares immediately, but will convert at the $8M cap when the Series A happens.