---
title: Safer Instrument | Next Wave Partners
description: The Safer is a structural alternative to the SAFE with equity participation and revenue-linked returns. Founder-friendly venture financing. Free template.
image: https://nextwave.partners/hubfs/New%20site%20featured%20image%20(1).png
---

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- [Founders](https://nextwave.partners/founders)
- [Investors](https://nextwave.partners/investors)
- [Thesis](https://nextwave.partners/thesis)
- [Research](https://nextwave.partners/research)
- [Safer](https://nextwave.partners/safer)
- [About](https://nextwave.partners/about)

### SAFER

# The Safer aligns founders, investors, and the businesses they build

Traditional venture financing forces a choice: founders give up control for capital, or investors wait a decade for binary exit outcomes. The Safer instrument eliminates this tradeoff.

The Safer (Simple Agreement for Future Equity with Repurchase) combines equity participation with revenue-linked returns. Investors receive revenue-based payments tied to company performance while retaining upside. Founders preserve control and can repurchase equity as their business grows. Both parties benefit when the company builds sustainable value.

[Download the Safer template](https://nextwave.docsend.com/view/nqrqij84vnfhr3yi?ref=nextwave.partners)

## How the Safer instrument works

### Key terminology

**Purchase Amount:** The initial capital the investor provides. Typical ranges: $250K for pre-seed, $500K–$1.5M for seed-stage companies.

**Honeymoon Period:** A window post-investment during which no repurchase payments are made. Typically 12–18 months. Gives the company runway to deploy capital before revenue obligations begin.

**Revenue Percentage: **The percentage of top-line gross revenue used to make quarterly repurchase payments after the honeymoon period ends. Typically 1%–10%, negotiated based on company economics and growth stage.

**Repurchase Percentage:** The portion of the original investment the investor agrees to sell back to the company through revenue payments. Typically 50%-95%. The remaining equity converts for full upside participation.

**Target Return:** The total return amount the investor aims to receive through repurchase payments. Typically 2x–3.25x the original investment. Once achieved, repurchase obligations end.

### The Safer investment lifecycle

01

#### Initial investment

Investor provides the Purchase Amount. Company and investor enter the Safer agreement with negotiated terms.

02

#### Development phase

During the Honeymoon Period, no repurchase payments are made. The company deploys capital without payment obligations.

03

#### Revenue participation

Once the Honeymoon Period ends, repurchase payments begin. Payments continue until cumulative distributions reach the Target Return.

04

#### Termination

The Safer agreement ends when the investor receives full payment from either a Liquidity Event or Dissolution Event.

#### Termination scenarios

##### Liquidity event

Upon exit, the investor receives the greater of: (a) the Cash-Out Amount, or (b) the Conversion Amount based on equity ownership at the valuation cap.

##### Dissolution event

If the company winds down without a liquidity event, the investor receives the Cash-Out Amount, ensuring partial return of capital.

### Model the economics with the Safer calculator

## What the Safer offers founders

![Company control icon](https://nextwave.partners/hubfs/Lock-Shield--Streamline-Ultimate.svg)

### Company control

No board seats required. No voting rights transferred. Governance remains with the founding team.

![Equity repurchase icon](https://nextwave.partners/hubfs/Diagram-Dash-Circle-Large-Head--Streamline-Ultimate.svg)

### Equity repurchase

Revenue payments reduce investor equity over time. As your business generates cash, you recapture ownership.

![Patient capital timeline icon](https://nextwave.partners/hubfs/Common-File-Text-Clock--Streamline-Ultimate.svg)

### Patient capital

No artificial pressure to exit. The Safer accommodates the development timelines deep tech requires.

![Transparent terms icon](https://nextwave.partners/hubfs/Data-File-Search--Streamline-Ultimate.svg)

### Transparent terms

All parameters negotiated upfront. No convertible note surprises. No complex waterfall provisions. 

## What the Safer offers investors

![Earlier liquidity icon](https://nextwave.partners/hubfs/Cash-Network--Streamline-Ultimate.svg)

### Earlier liquidity

Quarterly distributions begin after the Honeymoon Period and companies generate revenue.

![Equity upside icon](https://nextwave.partners/hubfs/Seo-Search-Graph--Streamline-Ultimate.svg)

### Equity upside

Remaining equity converts at the original cap. The Safer doesn't cap upside, it adds a floor.

![Structural alignment icon](https://nextwave.partners/hubfs/venture_building_navy.svg)

### Structural alignment

Revenue-based returns mean investors benefit when companies build sustainable operations.

![Downside protection icon](https://nextwave.partners/hubfs/security_trust_navy.svg)

### Downside protection

In dissolution scenarios, investors receive remaining Cash-Out Amount before equity distribution.

![Professionals reviewing legal documents in a meeting](https://nextwave.partners/hs-fs/hubfs/department-members-reviewing-paperwork-in-boardroom-office-meeting-to-discuss-new-busi-SBI-349581237_crop_resize.jpg?width=800&height=571&name=department-members-reviewing-paperwork-in-boardroom-office-meeting-to-discuss-new-busi-SBI-349581237_crop_resize.jpg)

## Legal foundation

The Simple Agreement for Future Equity with Repurchase (Safer) was developed in collaboration with Polsinelli, a leading national law firm with deep expertise in venture financing and securities law. The legal structure represents over a year of development. We solicited feedback from dozens of entrepreneurs, investors, and attorneys. The final form addresses edge cases, regulatory requirements, and practical implementation concerns that emerge in actual deployment.

Special thanks to Christopher Simpson and the corporate and securities team at Polsinelli for their contribution to this work.

[Download the Safer form](https://nextwave.docsend.com/view/nqrqij84vnfhr3yi?ref=nextwave.partners)

*Neither Next Wave Partners nor Armanino are responsible for the content or results of using the Safer Agreement form or any other documents from our website. Please consult with a qualified accountant and tax advisor in your jurisdiction before using these materials.*

## Accounting and tax treatment

The Safer's hybrid structure requires clear guidance on accounting treatment and tax implications. We partnered with Armanino, a top-25 accounting firm, to produce comprehensive documentation for CFOs, accounting teams, and tax advisors.

The whitepaper covers recognition timing, revenue percentage treatment, conversion mechanics, and reporting requirements under current accounting standards. This guidance enables companies to adopt the Safer without creating audit complications or tax uncertainty.

[Get the whitepaper](https://nextwave.partners/research/safer-accounting/?hsLang=en)

*Neither Next Wave Partners nor Armanino are responsible for the content or results of using the Safer Agreement form or any other documents from our website. Please consult with a qualified accountant and tax advisor in your jurisdiction before using these materials.*

## Explore further

The Safer is one component of how Next Wave Partners works with founders and investors. It reflects our broader thesis: capital structures should align with how deep tech companies develop.

### **For founders**

Learn how our venture studio model combines patient capital with embedded operational support.

[Explore the Venture Studio →](https://nextwave.partners/founders?hsLang=en)

### **For investors**

Explore our investment thesis and the structures we've built for deploying patient capital.

[Explore options →](https://nextwave.partners/investors?hsLang=en)

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Important Disclosure: Next Wave Capital Management, LLC ("NWCM") is an operating company, not an investment fund. NWCM is registered with the U.S. Securities and Exchange Commission (SEC) as an Exempt Reporting Adviser (ERA) under the Investment Advisers Act of 1940. NWCM is not a broker-dealer, underwriter, or FINRA member, and does not solicit or place securities on behalf of third parties. Any investment opportunities presented through Next Wave Capital Fund I or the Next Wave Network are offered only to accredited investors and are subject to applicable securities regulations. NWCM does not receive transaction-based or success-based compensation. All investors are encouraged to perform independent due diligence and consult their own legal, tax, and financial advisors before investing.

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