ABOUT THE SAFT

The Simple Agreement for Future Tokens (SAFT) is a contractual agreement whereby investors make an investment in a company in exchange for the right to a future distribution of tokens by the company upon a specified event. Inspired by Y Combinator’s Simple Agreement for Future Equity (SAFE), the SAFT is intended to streamline the token sale process by creating a simple, uniform standard for the market that optimizes the certainty, speed, and cost upon which token companies and investors can complete capital raises.

The SAFT represents a pre-sale of the tokens that are to be delivered at an ultimate token sale and distribution, often referred to as the “network launch”. As an inducement for participating in the SAFT offering prior to the network launch, investors are often given a specified discount on the price of the tokens to be distributed if such network launch occurs. Any such discount is determined in the sole discretion of the company offering the SAFT.

The timing of when investors may receive their tokens is specified in the SAFT. In some SAFTs, investors will receive their tokens upon a network launch, if any such network launch occurs. In other SAFTs, investors will receive their tokens pursuant to a specific vesting schedule following the network launch, which is intended to incentivize long-term support by investors and to minimize potential volatility in the market for the tokens. Such timing, including any vesting schedule, is determined in the sole discretion of the company offering the SAFT.

The use of the SAFT also provides a clear and conservative path to compliance with current U.S. securities laws and regulations. The SAFT itself has been structured as a security instrument exempt from registration with the U.S. Securities and Exchange Commission. The exemption allows the token companies to generally solicit the SAFT offering to the public but requires that the SAFT investors be limited to “accredited investors” that have been verified through certain verification processes.

By default, all offerings on SAFT Launch will utilize the SAFT.

Disclaimer: Prospective issuers and investors are not to construe this overview as investment, legal, tax, regulatory, financial, accounting or other advice, and this overview is not intended to provide the sole basis for any evaluation of an offering of or investment in a SAFT. Prior to any such offering or investment, a prospective issuer and investor should consult with its own legal, investment, tax, accounting, and other advisors to determine the potential benefits, burdens, and other consequences of such offering or investment.
*This overview was prepared with assistance by Scannavino Lamb LLP.