SAFT vs. SAFE: Navigating Web3 Fundraising Models.

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https://droomdroom.com/saft-vs-safe-in-web3/


SAFT vs. SAFE: Key Differences in Web3 Fundraising 🚀

In Web3 fundraising, SAFT (Simple Agreement for Future Tokens) and SAFE (Simple Agreement for Future Equity) are two popular investment instruments. While both allow startups to raise funds before they launch, they serve different purposes and investor types.

🔹 What is SAFE?

SAFE is a contract where investors provide capital today and receive equity in the future, typically during a later funding round. It’s a traditional investment model used in early-stage startups, created by Y Combinator in 2013. SAFE agreements don’t have interest rates or maturity dates, making them flexible but risky—investors only get shares if the company succeeds.

🔹 What is SAFT?

SAFT is designed for crypto startups. Instead of equity, investors receive future tokens when the project launches its blockchain. It helps blockchain firms fund technological development before tokens exist. However, SAFT agreements are subject to securities regulations and are only offered to accredited investors.

⚖ Key Differences

✔ SAFE = Future Equity 📈 | SAFT = Future Tokens 🪙
✔ SAFE for tech startups | SAFT for crypto projects
✔ SAFT investors depend on token launch & value fluctuations

🚨 Risks to Consider

• SAFE investors risk losing capital if the startup fails.

• SAFT investors depend on the project’s success and token utility.

Understanding these differences is crucial for both startups & investors in choosing the right fundraising method. 💡