SAFT Generator

What Is a SAFT and When Should You Use One?

A Simple Agreement for Future Tokens (SAFT) is a specialized investment contract designed for blockchain startups raising capital before their tokens are fully developed or functional. SAFTs serve as an intermediate step in token fundraising — they allow developers to raise money from accredited investors while delaying the actual issuance of tokens until the network or platform is functional.

Think of a SAFT as a promise: investors provide capital today in exchange for tokens that will be delivered once the network launches. Unlike an Initial Coin Offering (ICO) where tokens are sold directly to purchasers, a SAFT is the sale of a right to receive tokens in the future when certain conditions are met.

Legal Framework and Compliance

The legal foundation of SAFTs centers around the concept that while the SAFT itself is a security (and thus subject to securities regulations), the tokens that will eventually be delivered might not be classified as securities if they have genuine utility when the network launches. Key regulatory considerations include:

• Securities Law Compliance: SAFTs are typically offered under Rule 506(c) of Regulation D, which allows general solicitation but requires all investors to be verified as accredited.
• The Howey Test: Courts and the SEC use this test to determine whether a transaction qualifies as an “investment contract” (and thus a security).
• Token Functionality: For the eventual tokens to potentially avoid classification as securities, they should have genuine utility within a functioning network.
• Jurisdictional Considerations: Different countries have vastly different approaches to regulating crypto assets.

Key SAFT Terms Explained

Discount Rate

The discount rate (typically 20–40%) rewards early SAFT investors by giving them a lower price per token compared to the public Network Launch price. Higher discounts attract investors but can dilute token economics.

Valuation Cap

The maximum company valuation at which the investment converts to tokens. This protects investors if the company’s value increases dramatically before the Network Launch.

Dissolution Event

If the company dissolves before tokens are issued, the SAFT typically provides for repayment of the purchase amount (plus any accrued interest) to investors.

Network Launch

The triggering event for token delivery — typically defined as a bona fide public sale or distribution of functional tokens on an operational network.

SAFT vs. SAFE vs. ICO

While SAFTs are modeled after the Y Combinator SAFE (Simple Agreement for Future Equity), they differ in that SAFTs convert to tokens rather than equity. Unlike ICOs, which sell tokens directly (often raising securities law concerns), SAFTs acknowledge their status as securities and comply with existing regulations, deferring token delivery until the network is functional.

I Built This Generator Because...

As a California-licensed attorney working extensively with blockchain startups, I saw too many founders either paying $10,000+ for a basic SAFT or cobbling together templates that missed critical regulatory provisions. This generator produces a comprehensive, securities-law-compliant SAFT with proper Regulation D/S language, accredited investor representations, transfer restrictions, and dissolution protections — all customized to your specific token economics and jurisdictional requirements.