Learning Objectives
SAFEs, or Simple Agreements for Future Equity, which were introduced by Y-Combinator in 2013, are a popular investment instrument in early-stage startup financings. Y-Combinator intended for a SAFE to be a simple investment instrument requiring minimum negotiation. However, from a tax perspective, the treatment of SAFEs is not so simple. This program will provide an overview of the various forms of SAFEs and their tax treatment. Although SAFEs were intended for use by C corporations, we have seen them used by both LLCs and S corporations which implicate a number of complicated and troublesome tax issues.
Major Topics
This program will cover the substantive tax law and discuss commonly-encountered tax issues implicated by the use of SAFEs