# Fundraising with SAFEs on Atlas FAQ Atlas founders can fundraise using SAFEs from their Atlas dashboard, in the **Fundraising** tab. Founders can create, send, and track their SAFEs, which are pre-filled with their Atlas company details. Read about [sending a SAFE with Atlas](https://docs.stripe.com/atlas/fundraise-with-safes). ## SAFEs overview ### What are SAFEs? Simple Agreements for Future Equity, or SAFEs allow you to raise money from investors by giving them the right to receive equity in your company when you later raise your first priced round or have a liquidity event. The SAFE was developed by [Y Combinator](https://www.ycombinator.com/documents#about) in 2013, and has since become a common way for early stage companies to raise money. ### What are the different types of SAFEs? There are multiple types of SAFEs. Three commonly used types are: 1. **Valuation cap**: Sets a maximum company valuation at which the SAFE converts into equity. According to data from Carta, this is the most used type of SAFE. Example: You raise a USD 100,000 SAFE with a USD 5M valuation cap, and your next round is priced at USD 10M. The SAFE converts as if your company were valued at USD 5M, with the investor getting USD 100,000/USD 5,000,000 = 2% of your company rather than USD 100,000/USD 10,000,000 = 1% of your company. 1. **Discount:** Gives your investor a percentage discount on the price per share in your next priced round when their SAFE converts to equity. Example: You raise a USD 100,000 SAFE with a 20% discount. When the next round prices shares at USD 1.00 each, the investor’s shares convert at USD 0.80 per share (USD 1.00*(1-20%), so the investor gets USD 100,000/USD 0.80 = 125,000 shares rather than USD 100,000/USD 1.00 = 100,000 shares. 1. **Valuation cap + discount:** Both sets a maximum company valuation at which the SAFE converts into equity, and gives your investor a discount on the price per share in your next priced round. The SAFE converts at whichever gives the investor the most equity in your business: the valuation cap or the discount. Example: You raise a USD 100,000 SAFE with a USD 5M cap and a 20% discount. Your next round is priced at USD 10M and your shares are priced at USD 1.00. The SAFE converts based on the USD 5M cap because it gives them more shares than the 20% discount. * Discount calculation: 1. 20% discount on USD 1.00 = USD 0.80 1. USD 100,000/USD 0.80 = 125,000 shares * Valuation cap calculation: 1. share price at USD 5M cap = USD 5,000,000/USD 10,000,000 = USD 0.50 1. USD 100,000/ USD 0.50 = 200,000 shares ### How does a valuation cap work? A valuation cap is the maximum company valuation at which the SAFE converts into equity in your company. If your next priced round gives your company a higher valuation than the valuation cap of a SAFE, the SAFE investor receives shares in your company as if the company were valued at the valuation cap rather than the new, higher valuation. Their ownership will be calculated as their investment divided by the valuation cap, rather than their investment divided by the new valuation. This results in them getting a larger share of your company equity than they would if they did not have a valuation cap. If you raise money at a lower valuation than the valuation cap of a SAFE, the investor on that SAFE receives shares based on the new company valuation, rather than the valuation cap. **Do investors need to be accredited?** Lawyers recommend that SAFE investors are accredited. Raising from non-accredited investors is technically possible under certain exemptions, but it adds legal and administrative complexity, including detailed disclosure requirements and compliance with securities laws. For most early-stage startups, leading law firms for startups like Cooley [advise](https://www.cooleygo.com/can-you-raise-money-from-unaccredited-investors/) that costs and risks of raising from non-accredited investors outweigh the benefits. ## Board consent ### Why does my board need to sign a board consent? A company’s board of directors should authorize any fundraising, including SAFEs. Board consent is the formal record of your board’s approval. It ensures your company follows standard corporate governance procedures. ### What do I do if I want to raise more than my board consent allows? The Atlas board consent authorizes a specific amount of fundraising with SAFEs. If you try to raise more than what was approved, you’ll need to work with an attorney to update the fundraising maximum in your board consent. To avoid working with an attorney, set a maximum raise amount in Atlas that is higher than what you anticipate you’ll need to fundraise, giving yourself a buffer in case you later decide to raise more. ### Can I obtain board consent in retrospect after collecting funds? Lawyers recommend obtaining board authorization prior to fundraising. ## Fundraising with Atlas SAFEs ### Who can use Atlas SAFEs? Any founder with a US C Corp formed on Atlas after June 10th, 2024 can use Atlas SAFEs. ### Does an Atlas board consent cover past SAFE fundraising? No, the Atlas-generated board consent document only covers future fundraising. If you want to secure board consent for fundraising that has already taken place off Atlas, consult a lawyer. ### Do Atlas SAFEs support SAFEs with valuation caps and discounts? Atlas only supports SAFEs with valuation caps, the most commonly used form of SAFE. We’re working on offering SAFEs with discounts. ### Who created the SAFE template offered by Atlas? Atlas SAFEs use the industry-trusted post-money Y Combinator (YC) template. “Post-money” means the SAFE investor’s ownership is calculated as a percentage of the company after their SAFE and all other issued SAFEs have converted, and the investment is included in the company valuation used for this calculation. For instance, if you raise a USD 500K SAFE on a USD 5M post-money valuation, your investor will own 10% of the company after conversion. ### Can I send a SAFE to individual and institutional investors, like VCs? Yes. You can send Atlas SAFEs to individuals and institutional investors. ### How do I correct a mistake in a SAFE, like an incorrect name or investment amount? If you discover a mistake in a SAFE that you’ve already sent to an investor, you can void it from your dashboard: 1. In your Atlas Dashboard, go to the **Fundraising** tab, find the SAFE you’d like to void, click the three dots in its row, and select **Void**. The SAFE’s status will update to Voided. 1. The company signer and investor will receive an email from “Stripe Atlas via DocuSign” notifying them that the SAFE has been voided. 1. After voiding the SAFE, you can create a new one by clicking **Create SAFE** in your **Fundraising** tab. ## What happens after both parties sign the SAFE? **If you have a Stripe financial account (Treasury onboarded):** Atlas automatically emails the investor a link to an investment details page. You also receive a confirmation that the funding request was sent. **If you don't have a Stripe financial account:** Atlas notifies you that both parties have signed. You'll need to share your bank details with the investor directly and coordinate the transfer outside of Atlas. ## What is the investment details page? (Treasury accounts only) If you have a Stripe financial account, the investment details page shows your investor: - The commitment amount - The investment name and current status - Your company's Stripe financial account routing and account number, or wallet address, depending on your currency eligibility The investor copies these details to send funds from their bank account or custodial wallet. They can transfer the full commitment or a partial amount. ## How does receiving funds affect my SAFE status? **If you have a Stripe financial account:** When funds arrive they appear in your **Balances** and the SAFE automatically updates to **Funded** in the Fundraising table — no manual step is required. **If you don't have a Stripe financial account:** After you confirm receipt of funds through your external bank, go to the Fundraising table and manually mark the SAFE as **Funded**. ## What funding methods are available? (Treasury accounts only) If you have a Stripe financial account, the following methods can be used to fund your SAFE: - Funding method - Funds available - Fee - How to initiate --- - ACH* - 1 business day - Free - Investor initiates from their bank --- - Wire - Same day - USD 2 USD - Investor initiates from their bank --- - USDC - Under an hour - Free - Investor initiates from their wallet * \*Stripe doesn't support SWIFT transfers for funding SAFEs. * If you have a financial account that supports either fiat (USD) and/or stablecoin (USDC) support, then the investor details page will include account and wallet info respectively. ## How do I receive funds without a Stripe financial account? Share your bank account details directly with the investor. Once funds have been received, open the Fundraising table in your Atlas Dashboard and manually update the SAFE status to **Funded**. Some Atlas partners offer bank accounts you can open even before your EIN arrives. Go to the [Perks page](https://dashboard.stripe.com/atlas/perks) in your Atlas Dashboard and look for banking partners labeled **Pre-EIN**. ## Legal notice This article is for informational purposes only and is not legal advice. Consult qualified legal counsel regarding SAFE terms, SEC accredited-investor requirements, and any other applicable laws or regulations. ### Do I need a lawyer to fundraise with a SAFE using Atlas? Atlas is designed to be used without help from a lawyer, but you can always consult one if you have additional questions. **Can I fundraise with Atlas if I didn’t incorporate my company using Atlas?** No. You can only use Atlas to fundraise if you incorporated using Atlas.