SAFE: Valuation Cap, No Discount (Singapore) by Y Combinator
The SAFE: Post-Money Valuation Cap (Singapore) is a Simple Agreement for Future Equity tailored for Singapore-incorporated companies. It allows investors to convert their investment into equity at the lower of the future financing price or a price based on a set valuation cap, protecting them from dilution. This is Y Combinator’s standard Singapore law version, widely used in early-stage startup financing.
THE OFFERING AND ISSUANCE OF THIS INSTRUMENT AND ANY SECURITIES ISSUABLE PURSUANT HERETO IS NOT ACCOMPANIED BY A PROSPECTUS REGISTERED WITH THE MONETARY AUTHORITY OF SINGAPORE. THESE SECURITIES MAY NOT BE RE-OFFERED OR RESOLD UNLESS THE RE-OFFER AND RESALE ARE MADE IN COMPLIANCE WITH THE SECURITIES AND FUTURES ACT (CHAPTER 289) OF SINGAPORE.
THIS INSTRUMENT AND ANY SECURITIES ISSUABLE PURSUANT HERETO HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES OF AMERICA SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED IN THIS SAFE AND UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM.
SAFE (Simple Agreement for Future Equity)
THIS CERTIFIES THAT in exchange for the payment by [investor name] (the “Investor”) of [purchase amount] (the “Purchase Amount”) on or about [effective date], Company Registration number [company registration number], a private limited company incorporated in Singapore (the “Company”), hereby issues to the Investor the right to certain of the Company’s Capital Shares, subject to the terms described below.
This Safe is one of the forms available at http://ycombinator.com/documents and the Company and the Investor agree that neither one has modified the form, except to fill in blanks and bracketed terms.
The “Post-Money Valuation Cap” is [post-money valuation cap]. See Section 2 for certain additional defined terms.
Events
(a) Equity Financing. If there is an Equity Financing before the termination of this Safe, on the initial closing of such Equity Financing, this Safe will automatically convert into the greater of: (1) the number of Standard Preference Shares equal to the Purchase Amount divided by the lowest price per share of the Standard Preference Shares; or (2) the number of Safe Preference Shares equal to the Purchase Amount divided by the Safe Price.
In connection with the automatic conversion of this Safe into Standard Preference Shares or Safe Preference Shares, the Investor will execute and deliver to the Company all of the transaction documents related to the Equity Financing; provided, that such documents (i) are the same documents to be entered into with the purchasers of Standard Preference Shares, with appropriate variations for the Safe Preference Shares if applicable, and (ii) have customary exceptions to any drag-along applicable to the Investor, including (without limitation) limited representations, warranties, liability and indemnification obligations for the Investor.
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About this template
What is this template?
This is an investment instrument that grants the right to future shares rather than immediate equity or debt. It is not a convertible note as it lacks an interest rate and a maturity date. The document specifically includes Singapore-specific regulatory legends and references to the Securities and Futures Act.
When should you use it?
Use this when a Singapore-incorporated startup needs a fast, standardized way to document seed investment without valuing the company today. Use a Singapore-specific Convertible Note if the investor requires a repayment date and interest.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1(a) | Equity Financing | Automatically converts the Purchase Amount into Standard Preference Shares or Safe Preference Shares upon the closing of a bona fide capital raise. |
| 1(b) | Liquidity Event | Entitles the Investor to receive either the Purchase Amount or a Conversion Amount calculated using the Liquidity Price during a Change of Control. |
| 1(c) | Dissolution Event | Grants the Investor a right to receive the Cash-Out Amount immediately prior to the voluntary or involuntary winding up of the Company. |
| 1(d) | Liquidation Priority | Establishes that the Safe is junior to creditors, on par with other Safes, and senior to Ordinary Shares. |
| 1(e) | Termination | Ends the agreement immediately following the issuance of Capital Shares or the full payment of amounts due under a Liquidity Event. |
| 2 | Post-Money Valuation Cap | Defines the fixed dollar amount used to calculate the Safe Price and Liquidity Price for share conversion. |
| 4(b) | Accredited Investor Status | Requires the Investor to confirm status as an accredited investor under Section 4(a) of the Securities and Futures Act of Singapore. |
| 5(f) | Governing Law | Subjects the agreement and all related obligations to the laws of Singapore and the non-exclusive jurisdiction of Singaporean courts. |
Who it's for
- a Singapore private limited company raising early-stage capital from an accredited investor
- an investor seeking post-money valuation protection without a percentage discount on future shares
- a startup using the standard Y Combinator Simple Agreement for Future Equity framework
How long it runs and how it's signed
Law it's drafted under
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