Safe agreements, also known as Simple Agreements for Future Equity, are a popular way for startups to raise seed funding without having to set a valuation for their company. Instead, investors receive the right to convert their investment into equity in the future, based on predetermined terms.

While safe agreements can be a great tool for startups, there are some risks involved. One key concern is that the terms of a safe agreement may not be favorable to the startup in the long run. For example, if the startup is very successful and valued much higher than expected when it comes time to convert the safe agreement to equity, the investor may end up receiving a much larger share of the company than initially intended.

To mitigate these risks, some startups are turning to “safe agreement startups”. These companies offer a platform where startups can create and manage safe agreements, while ensuring that the terms are fair and transparent for both parties.

One such company is SeedLegals, which has been dubbed the “turbo tax for funding rounds”. SeedLegals offers a comprehensive platform for creating, negotiating, and closing safe agreements, as well as other types of funding rounds. The platform includes features like a cap table manager, document automation, and an investor relations portal.

Another company in this space is Lex, which offers a similar platform for creating safe agreements and managing equity transactions. Lex also provides legal support and guidance throughout the fundraising process, ensuring that startups are complying with all relevant laws and regulations.

Using a safe agreement startup can be a great way for startups to simplify the fundraising process while ensuring that they are protected from potential risks. By using a trusted platform to create and manage their safe agreements, startups can focus on building their business and achieving their goals.