WHAT IS A SAFE?
You might love the idea of Doodeo and want our community for entertainers to succeed. You might also be wondering what is a SAFE?
So...What’s a SAFE?
The SAFE, or Simple Agreement For Future Equity, is designed to help people and companies invest quickly and efficiently in early-stage startups. This legal agreement was created by Y Combinator in 2013 to uncomplicate the process of supporting great companies and ideas. This was made possible in 2012 when the SEC established guidelines that allowed individual investors to participate in crowdfunding activities thanks to the JOBS Act (The Jumpstart Our Business Startups Act.) Since that time, SAFEs have been utilized by countless startups as the primary pathway for early fundraising.
Doodeo, SAFE, and You
Although Doodeo has a solid product with a clear roadmap, it’s a little tricky to work out what its future valuation will be. Choosing a valuation that’s too high might be daunting for investors, and settling on a valuation that’s too low might minimize the actual assets of the company. This is why we’ve chosen to employ a SAFE note that resolves the issue of over or underestimating Doodeo’s valuation.
The Valuation Cap Explained
Our SAFE note also includes a valuation cap that will determine the maximum amount that your SAFE note will convert into equity. Doodeo’s valuation cap has been set at $6.5M and a 20% discount. Once we raise another round of funds at a valuation of, let’s say, $14M, your SAFE will convert to equity at the capped value of $6.5M. You may ask, what if we raise funds again on a $3M valuation? Well, your SAFE will convert at a $3M valuation or a 20% discount of the valuation cap ($6.5M - 20%) whichever entitles you to more equity. We wanted to make sure that we’re offering a fair and exciting opportunity for our early bird investors. Keep reading to learn about our valuation cap discount!
The Bang for your Buck
Anyone that invests in the campaign before it reaches $250,000 in funds raised will receive a 10% discount on the valuation cap, putting it at $5.85M instead of $6.5M. Best of all, you can invest as low as $150 to as much as you would like.
If you have any further questions, please feel free to post them on our Q&A page and we will get back to you asap! 😃