Simple Agreement For Equity Template for Switzerland

A Simple Agreement for Future Equity (SAFE) under Swiss law is a standardized investment instrument that provides rights to future equity in a company in exchange for immediate capital investment. This document, governed by Swiss law and particularly the Swiss Code of Obligations, enables startups to raise capital without immediately setting a valuation or issuing shares. The agreement includes specific provisions for conversion events, investor rights, and company obligations, all structured to comply with Swiss corporate and securities regulations while maintaining the flexibility that makes SAFEs attractive to early-stage investors and companies.

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What is a Simple Agreement For Equity?

The Simple Agreement For Equity (SAFE) has become increasingly popular in Switzerland as an alternative to conventional equity investment structures. This document is typically used by early-stage companies seeking to raise capital quickly without the complexity and immediate valuation requirements of traditional equity rounds. Under Swiss law, the agreement must carefully balance the flexibility of the SAFE concept with local regulatory requirements, particularly those found in the Swiss Code of Obligations and financial market regulations. The document includes essential provisions for investment amount, conversion mechanisms, company representations, and investor rights, while incorporating specific Swiss legal requirements regarding share issuance and transfer. It's particularly suitable for startup companies in their seed or early funding stages, providing a streamlined way to secure investment while deferring complex valuation discussions and formal equity issuance.

What sections should be included in a Simple Agreement For Equity?

1. Parties: Identification of the company and the investor, including full legal names, addresses, and registration details

2. Background: Context of the investment, including company status and purpose of the SAFE

3. Definitions: Key terms used throughout the agreement, including 'Equity Financing', 'Liquidity Event', 'Dissolution Event', and 'Company Capitalization'

4. Purchase Amount: Specification of the investment amount and payment terms

5. Company Representations: Company's warranties regarding its authority, corporate status, and compliance with laws

6. Investor Representations: Investor's warranties regarding investment capacity and sophistication

7. Events: Detailed treatment of Equity Financing, Liquidity Events, and Dissolution Events

8. Conversion Mechanics: Process and calculations for converting the investment into equity

9. Term: Duration of the agreement and conditions for termination

10. General Provisions: Standard clauses including notices, amendments, governing law, and dispute resolution

What sections are optional to include in a Simple Agreement For Equity?

1. Most Favored Nation: Optional provision ensuring investor receives best terms offered to other SAFE holders, typically included for early investors

2. Pro-rata Rights: Gives investor right to participate in future financing rounds, included when negotiated with sophisticated investors

3. Information Rights: Grants investor rights to receive financial information, typically for larger investments

4. Board Observer Rights: Gives investor right to attend board meetings, usually for strategic investors

5. Transfer Restrictions: Limits on investor's ability to transfer the SAFE, included for closely-held companies

6. Founder Commitments: Specific obligations of founders, included when personal commitments are required

What schedules should be included in a Simple Agreement For Equity?

1. Cap Table: Current capitalization structure of the company

2. Calculation Examples: Illustrations of conversion calculations in different scenarios

3. Form of Shareholders' Agreement: Template of shareholders' agreement to be executed upon conversion

4. Investment Risk Factors: Detailed description of investment risks specific to the company

5. Compliance Certificate: Template for compliance certification under Swiss securities laws

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Equity Agreement

Cost

Free to use

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