Ask HN: Does a SAFE Constitute a Term Sheet?

5 points·jmanooch··8 comments

I have had a pretty intense disagreement with one of my advisors regarding whether the SAFE constitutes a Term Sheet. My understanding is that it does, and that it makes no sense to supply an additional / separate term sheet. Our lawyers (solid ones) indicate a term is not additionally necessary. But the advisor has dug his heels in. Sigh.

Anyone with a call on this, esp on that is lawyer-tested?

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A signed SAFE would equate to a signed financing deal. Asking for a term sheet after the deal is signed seems... odd. We supply a SAFE summary upon execution for the investors records along with the executed SAFE.

SAFE not signed yet, but thanks.

A Term Sheet is a non-binding document that highlights the details of a Financing Note (in this case, the SAFE)

Following up - The advisor is just being lazy and doesn't want to read the ACTUAL SAFE Note, and would prefer an abridged version (i.e Term Sheet).

I think that's the thing. Thank you.

Of course it’s not necessary. Did you/advisor read the SAFE? Now it’s time to decide if your “advisor” (investor?) is bringing enough to the table to comply with his amateurish requests and handholding.

I've read the SAFE and don't think it makes sense, since the SAFE is clearly its own term sheet. But the advisor I think IS being lazy by not reading it, and just wants a summary for investors.

He is very senior and not amateurish, I think the issue is he does not like SAFEs (says they are not SEC-tested) and thus I think won't read them, and thinks any deal of any sort without a summary term sheet is not 'serious'.

Thanks.

[I mean the advisor's comments don't make sense, the SAFE makes good sense.]

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