Closing a SAFE Note Deal

Now that you’ve identified your investors and have received a commitment for financing, it’s time to start thinking through closing. Below will outline how to properly close and document the deal.

Closing the Deal

  1. Cover Letter

Send a letter that explains what is included in the SAFE package and provide instructions regarding how to sign the package. Additionally, explain that at the time of conversion, the investor will be expected to sign a share subscription agreement and a shareholders’ agreement.

  1. SAFE and Signature Package

Make it as easy as possible for signature pages to be found in the package. Consider sending the signature pages separately if the package contains multiple pages. If your funder has access to a computer, send the package in a DocuSign file if possible.

  1. Receiving the Funds: How to Receive and Issue a Receipt

Ensure that a time limit is determined for receiving the funds. This will prevent you from holding onto a signed SAFE without obtaining any funds for longer than desired. This can be tricky because you want to obtain the funds as quickly as possible. In the event that there is an issue around the timing of payment and you are holding onto a signed SAFE, discuss what your rights are with your advisors and legal counsel.

You can receive the funds directly in entirety, or dictate a requirement to collect a minimum amount of funds by a certain date. If there is a requirement to collect a minimum, consider collecting the funds through your lawyer who will hold the funds in trust. Your lawyer can return the funds back if the minimum is not raised.

When funds are received, you should send out a receipt. A receipt can be a simple email or a formal document that references the deal and the SAFE note.

  1. Tracking Your SAFE Investments

It is important for early-stage founders to properly record their outstanding SAFEs. Each issued SAFE can have a different valuation cap or conversion discount. As a result, if you fail to keep track of these details, it is possible that you can dilute your ownership more than you desire.

Track all SAFEs in a register of instruments convertible into securities. Potential investors will want to see this register when they are deciding to invest because the SAFEs and other options or convertible instruments will all affect the shareholder cap table.


  • The 4 closing documents to a SAFE deal are 1) Cover Letter 2) SAFE & Signature Package 3) Issuing Receipts, and 4) Tracking your investments in a register.
  • These closing documents will ensure the organization of your SAFE notes, which will aid when seeking financing from future potential investors.


This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk.

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Edited by: Rajah Lehal

Written by Ethan.