The safe is a simple agreement for future equity. It converts into stock when the company raises a price round. You don't needt lawyers to do a safe, it's available on line. The most important part of it is that it isn't debt, which is why it needed to exist.
We've cut down the ninth week of lectures to be even shorter and combined them into one podcast.
First, a lecture from Carolynn Levy. Carolynn is a partner at YC. Her lecture covers modern startup financing.
Then a lecture from Jared Friedman. Jared is also a partner at YC. His lecture focuses on advice for hard-tech and biotech founders.
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Topics
00:00 - Intro
00:33 - Carolynn Levy - Modern Startup Financing
1:33 - The basics: form a corporation, need money to grow?, sell a part of the company
2:58 - Fundraising terms
3:58 - What has changed: structure, access, focus
5:10 - What hasn't changed: preferred stock financing, valuation and dilution, communication
6:42 - Old way of raising early money: Series A preferred stock financing
8:33 - What was broken?
9:33 - The transition: bridge loan financings
10:46 - Realization: convertible promissory notes are a better way to fund early stage startups
12:01 - Modernization of the convertible - SAFE (Simple Agreement for Future Equity)
14:03 - When do priced rounds happen?
15:12 - Is modern early stage financing perfected?
18:01 - Takeaways
19:30 - Jared Friedman - Advice for Hard-tech and Biotech Founders
20:25 - What is a hard-tech company?
21:35 - Why start a hard-tech company?
25:06 - YC is the largest bio and hard-tech seed investor in the world
25:49 - How much of YC's advice applies to hard-tech founders?
26:33 - How do you make progress when you have a "heavy MVP"?
31:49 - How do you prove people will want your product, if you haven't built it yet?
32:57 - Letter of Intent
34:10 - Fundraising for hard-tech and biotech companies
36:15 - Final thought