Can non accredited investors use SAFE?

The unfortunate reality of United States securities law is that your company cannot take investment money from just anyone. The two easiest and cheapest ways to raise money for startups are Rule 506(b) and Rule 506(c) under Reg D. Under Rule 506(c), non-accredited investors are completely forbidden in the offering.

How much equity do I need for friends and family round?

Typically, these investors are individuals willing to invest anywhere between $10,000 and $150,000 of their own personal finances because they feel loyalty and affection for the founders or are motivated by their startup idea. This type of early-stage financing is commonly referred to as a “friends and family” round.

How does Y Combinator SAFE work?

SAFE stands for Simple Agreement for Future Equity. It was created by the team at Y Combinator and has been a popular method for investing at the earlier stage of a company. That’s where a SAFE comes in to play — it’s a form of convertible security that allows you to postpone the valuation part until later on.

What happens if you invest without being an accredited investor?

The SEC approved specific rules that limit the amount a non-accredited investor can invest. Those with an annual income or net worth that is below $100,000 are limited to investing no more than $2,000 or up to 5 percent of the lesser of their net worth or annual income.

Is family and friends share legal?

Friends and family investments aren’t made outside of securities law. They just happen to almost always fall within an exemption.

How Does friends and family investment work?

In essence, friends and family investors are a form of crowdfunding. You might take small amounts of money from several family members or close friends, to raise a more significant overall sum. Friends and family investors may be willing to put money into your business venture on an interest-free basis.

What is YC Combinator safe?

Y Combinator introduced the safe (simple agreement for future equity) in late 2013, and since then, it has been used by almost all YC startups and countless non-YC startups as the main instrument for early-stage fundraising.

Is Y Combinator’s safe fundraising safe?

About the Safe Y Combinator introduced the safe (simple agreement for future equity) in late 2013, and since then, it has been used by almost all YC startups and countless non-YC startups as the main instrument for early-stage fundraising.

Does YC assume responsibility for the contents of the safe?

Needless to say, YC does not assume responsibility for the contents of, or the consequence of using, any version of the safe or any other document found on our website. Before using any of these forms, you should consult with a lawyer licensed in the country where your company was formed.

Is it okay to apply multiple times for YC?

Yes. In a typical YC batch, about the half companies applied multiple times before being accepted. If you’ve applied before and not gotten in, we strongly encourage you to apply again. Having made progress since your last application is a strong signal to us.