The Problem with SAFEs: The Governance Gap
Written by Harry Prabandham
Curated by Rubric Financial
Last updated
1 / 5
A SAFE Is a Financing, Not a Governance Framework
- A SAFE (Simple Agreement for Future Equity) transfers money now in exchange for equity later, and that is essentially all it does.
- It does not create a board seat, require board meetings, or impose any reporting or information obligations on the founder.
- A priced equity round bundles the money with a board, information rights, and a meeting cadence; a SAFE delivers only the money.
- The speed and simplicity that made SAFEs dominate early-stage fundraising are the same things that strip out the operating scaffolding a priced round provides.
Go deeper on this topic: The Hidden Governance Gap of SAFE Rounds→
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About the author
Harry PrabandhamFounder & CEO
Founder and CEO of StartupCFO. MBA from Wharton, MS in Computer Science, and decades of experience building and advising venture-backed startups.
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