# SAFER Explained: Answers to Questions We’ve Been Getting | SURGE

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- Published at: 2025-12-18 20:43:19 UTC
- Updated at: 2025-12-18 20:44:23 UTC

## Author
Miguel Jaramillo

## Subject
SURGE

## Content
Hey everyone — we’ve been getting really good questions about how our SAFER works, so we put together a short, plain-English FAQ to help clarify the basics. It’s meant to be educational and easy to follow, not legal language, and the actual SAFER agreement governs all terms.Feel free to take a look and ask us anything that’s still unclear.Image above is for illustrative purposes only. No guarantees of revenue, returns, or liquidity. SAFER terms, risks, and outcomes are governed solely by the executed agreement and the company’s Reg CF disclosures.SAFER – Frequently Asked Questions What is a SAFER?A SAFER (Simple Agreement for Future Equity with Repurchase) is an investment contract. You are not buying stock today. Instead, the contract gives you (i) a right to receive revenue-based payments while the company is operating, and (ii) the potential to participate in an exit (such as a sale of the company) based on a valuation cap set when you invest.How can a SAFER deliver value?A SAFER may deliver value in two ways:Quarterly repurchase payments while the company is operating, if the company generates revenue.A payout at a liquidity event (for example, a sale of the company), based on the remaining SAFER balance and the valuation-cap conversion mechanics.How do repurchase payments work?Repurchase payments are typically calculated each quarter as gross revenue multiplied by the agreed revenue percentage. Payments generally begin after any agreed “honeymoon period.” Repurchase payments continue until the total payments you have received equal the agreed target return, or until an exit or dissolution happens first. If the company has no revenue in a quarter, no repurchase payment is due for that quarter. Repurchase payments are not guaranteed and depend on the company’s ability to generate revenue.What does “Target Return” mean (and what does it not mean)?The target return is the maximum total amount of repurchase payments the company will pay under the revenue-based repurchase feature (for example, 2.5x [early-bird], or 2.0x of your investment). Your target return does not go down if the company later raises more money or issues more shares. Reaching the target return stops repurchase payments, but it does not automatically end the SAFER contract. The target return is not a promise that you will actually receive that amount; it is a contractual cap on the repurchase-payment feature if revenue is sufficient.What does “Repurchase Percentage” mean?The repurchase percentage is used in the SAFER formula that determines the remaining SAFER balance (the “SAFER amount”) over time. In practical terms, after the target return has been fully paid, the SAFER typically leaves a remaining balance designed to support exit participation (sometimes informally called a “stub” or “equity kicker”).Example (illustrative only): If the repurchase percentage is 90%, then after the target return has been fully paid, the remaining balance used for exit participation would be 10% of the original investment amount.How does exit participation work?If the company has a liquidity event, the SAFER provides a payout based on the remaining SAFER balance at that time. At an exit, the SAFER is designed so you receive the better of (a) a cash-out amount based on the remaining SAFER balance, or (b) an amount based on converting that remaining balance into shares using the agreed post-money valuation cap. The valuation cap is set when you invest and is not changed by later financing rounds. However, the remaining SAFER balance can be reduced over time as repurchase payments are made. Because each exit is different, the exact payout can vary. The signed SAFER agreement controls.What are the key risks? (Mandatory Reg CF Language)This is a high-risk investment. You could lose some or all of your investment. Repurchase payments depend on revenue and may be small, delayed, or never occur. There may never be a liquidity event, and the timing of any liquidity event is unpredictable. Tax outcomes can be complex and depend on your individual situation; consult your tax advisor.Important disclaimer (More Mandatory Reg CF Language)This summary is provided for investor education and convenience only and is not legal, tax, or investment advice. In the event of any inconsistency, the executed SAFER agreement governs.