How do SAFEs Work?

A SAFE (Simple Agreement for Future Equity) allows a company to raise money now in exchange for equity at a future financing round. When the company completes its next priced funding round, the SAFE typically converts into shares. Unlike a convertible note, a SAFE does not accrue interest and has no maturity date. Investors may receive those shares at a valuation cap, a discount to the new investors’ price, or both.

The Innovation Sandbox (ISB) SAFE is uncapped and uses a discount-only structure. Investors receive shares at a discount in the company’s next priced round, which rewards them for investing early. Founders get capital to deploy now and defer setting a valuation until that round.

The Terms

The investment will be made through an uncapped SAFE using a modified version of the publicly available "Discount, No Valuation Cap" SAFE template from Y Combinator, together with a Side Letter that sets out additional investor rights. Key terms are outlined below:

Valuation Cap: None

Discount: Sliding scale based on the time between the ISB SAFE investment and closing of the next priced equity financing.

a) Fewer than 90 days: 5%

b) At least 90 days but fewer than 180 days: 10%

c) At least 180 days but fewer than 270 days: 15%

d) 270 days or more: 20%

Sale or Dissolution: In the event of a sale or dissolution of the company while the SAFE remains outstanding, the SAFE Investor is entitled to the greater of a 1x return on its SAFE investment or the amount it would have received had the SAFE converted into equity at the time of the sale.

Pro-Rata Rights: Yes (via see side letter for terms)

Information Rights: Yes, with included confidentiality protections (section 5 of see side letter for further explanation)

Major Investor Rights: Major investor rights will be determined at the time of a Conversion Financing based on the threshold defined in the Company's financing documents.

Board Seat: No

Is the investment required: Yes, to be eligible for selection as a Top 10 Finalist, companies must accept the SAFE and Side Letter. The goal of the SAFE is to provide meaningful runway to scale while highlighting the brand awareness and pipeline development that many ISB Finalists experience from being on stage.

Who is Crosspoint: Crosspoint Capital is an investment firm that focuses on the cybersecurity and infrastructure software markets. Crosspoint has assembled successful executives and experts to partner with high-growth technology companies. Crosspoint has offices in Menlo Park, CA and Boston, MA. For more information visit: www.crosspointcapital.com.

You can find detailed information by downloading the full SAFE and side letter here. Please contact us at RSAC.InnovationSandbox@info.RSAConference.com if you have any further questions about the SAFE or side letter.

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Benefits of Being an Innovation Sandbox Finalist

Being an RSAC™ Innovation Sandbox (ISB) Finalist means many benefits, and now, finalist-friendly capital. The exposure of the Innovation Sandbox program gives judges and other founders heightened inbound interest from potential customers, and the Innovation Sandbox also positions founders to meet the broader RSAC Community, including the newly formed ISB Founders' Circle.

As of January 1, 2026, RSAC Innovation Sandbox Finalists have raised an average of $27 million at a 3.1x step-up in valuation in their first subsequent financing after becoming a Finalist ¹ and have raised over $17.8 billion after becoming Finalists. ²

¹ Figures are sourced from information publicly available via Crunchbase, and now.
² Figures are sourced from information publicly available via Pitchbook as of September 2025 for RSAC Innovation Sandbox Finalists since 2014. Actual results may vary.

 

Innovation Sandbox submissions open December 1, 2026.