The SAFE is intended exclusively for startups registered in the United States and adheres to U.S. laws, following the standard template provided by YCombinator. The only modification to the YCombinator template is the inclusion of both a valuation cap and a discount rate. Also, a brief side letter is attached. For startups registered in the European Union (EU), they must either relocate to the U.S. to utilize the SAFE or alternatively, use our CLA [[CLA (Convertible Loan Agreement)]], which is tailored for EU-based companies. ## Terms & Conditions ### Parties Involved The agreement is between the **Investor** (Gluon Syndicate) and the **Startup (Target Company)**. The Investor provides funding through a **SAFE (Simple Agreement for Future Equity)**, which grants the Investor the right to certain shares of the Company’s capital stock upon the occurrence of specific events. The SAFE is designed to provide flexibility while securing the Investor’s interests. ## Terms & Conditions ### Valuation Cap & Discount Rate - The **valuation cap** is set at **10x the amount raised**. - The **discount rate** for conversion is **20%**. ### Conversion Events The SAFE converts into equity under specific circumstances, including: - **Equity Financing**: If the company raises a qualifying financing round, the SAFE converts into shares at the lower of the valuation cap or the discounted price. - **Liquidity Event**: In case of a sale, merger, or IPO, the Investor’s SAFE converts into shares or entitles the Investor to a proportional share of the proceeds, based on the agreed terms. - **Dissolution Event**: If the company is liquidated or dissolved, the Investor is entitled to receive a proportional share of the remaining assets, subject to liquidation priorities. ### Investor Protections #### Pro Rata Rights The Investor has the right to maintain their ownership percentage in future financing rounds, subject to specific terms. #### Board Observer Seat As outlined in the Side Agreement, the Investor is entitled to appoint a **board observer**. This nominee has the right to attend board meetings and access the company’s financial, legal, and operational updates, without voting rights. ### Additional Terms #### Due Diligence and Legal Costs The company will cover all costs associated with the Investor’s due diligence and legal process (up to a maximum of 2,600 USD), payable from the investment proceeds. #### Governing Law The agreement is governed by the laws of the company’s incorporation, ensuring compliance with the applicable legal framework. ### Confidentiality Both parties must maintain confidentiality regarding the terms of the agreement and any sensitive company information.