Our new preferred deal structure is the automated SAFE (autoSAFE). This structure better serves our mission: increasing zero fee access for the self-directed investor by reducing the time, cost, and steps between Paid-In Capital and Invested Capital. It also neutralizes the issues founders previously encountered with allowing each investor to be on cap table.
| AutoSAFE | RUV | SPV | |
|---|---|---|---|
| Carry | 0% | 0% | Varies: 0%-20% |
| Admin Fee (generally paid pro rata by investor) | $0 | Varies: $0-$12k | Varies: $6k-$12k |
| Who holds voting rights | Investor | Founder | SPV Lead |
| Custodian of end investor’s holdings | Cap Table Management System | Fund Admin | Fund Admin |
| Qualifying investment for funds/syndicates (IANAL) | Yes | No | No |
| Setup Time | Virtually Instant | ~2 business days | ~2 business days |
| GP Commit Customary | N/A | N/A | Yes |
| Can support rolling closes to company? | Yes | No | No |
| Time to close between end investor doc execution and company receiving funds | 3-5 business days. Each commit closes as fast as ACH/Wire goes from investor bank account to company’s bank account | Varies: days to months. End investor’s funds go to RUV’s bank account and then once desired threshold is hit, founder initiate close to company’s bank account. | Varies: days to months. End investor’s funds go to RUV’s bank account and then once desired threshold is hit, founder initiate close to company’s bank account. |
| Deal level investment minimum | $1k | Varies: ~$0-$12k. Generally commits should be sufficient that expense ratio (admin fee/paid in capital) is ≤ 10% | Varies: ~$0-$12k. Generally commits should be sufficient that expense ratio (admin fee/paid in capital) is ≤ 10% |
| End investor investment minimum | $1k | $1k | $1k |
| Who signs if/when SAFE converts to equity? | Investor by default. Investor can also delegate right to sign for this specific case to founder | Founder | SPV lead |
| 506c general solicitation support (optional) | No. But a cap table management system with autoSAFE functionality can add this in future | Yes, generally fund admins now support this capability | Yes, generally fund admins now support this capability |
| Ability to issue different SAFEs to different investors in parallel | Yes | No. A RUV generally only invests in one instrument | No. A SPV generally only invests in one instrument |
| Cap table line items | N (where N is number of investors) | 1 | 1 |
The Alliance (with extremely rare exceptions) will not publish SPVs (into primary or secondary equity) until it has published 100 autoSAFEs.