VC & PE Glossary
What Is SAFT?
Updated
Definition
A SAFT (simple agreement for future tokens) is a contract where investors pay now for the right to receive digital tokens later — typically when a blockchain network launches — used in some crypto fundraises.
Useful for: Founders, Investors
SAFT (simple agreement for future tokens) is an investment contract granting tokens at a future network launch in exchange for capital today — modeled after the SAFE but for tokenized projects.
How it works
Investors wire funds to a project entity; upon mainnet launch or defined trigger, they receive a quantity of tokens per SAFT terms — often with lockups and vesting for team and investors alike.
SAFTs emerged in ICO-era crypto fundraising as a way to separate protocol development funding from public token distribution. Legal theory treated some SAFTs as securities offerings to accredited investors; public token sales were envisioned separately.
Terms mirror SAFE concepts: discounts, caps (on token price or allocation), and MFN clauses. Delivery depends on technical launch — delays create investor relations and litigation exposure.
Regulatory landscape shifted post-2020 enforcement; many U.S. teams now raise equity (SAFE) with token warrants or stay offshore with counsel — SAFTs are not a generic substitute for compliant planning.
Why it matters
- Founders: Securities law and token classification dominate structure — template docs without counsel are dangerous.
- Investors: Token illiquidity, lockups, and network failure risk differ from equity VC outcomes; diligence focuses on launch credibility and legal opinions.
Common mistake
Assuming SAFT fundraising avoids securities regulation because tokens are “utility” at launch. Regulators evaluate the full scheme, not labels at sale time.
Related ideas
See also SAFE, equity token warrant, KYC, and liquidity event.
Related terms
- Equity + Token Warrant — Equity + token warrant is a hybrid crypto venture structure—investors buy traditional equity plus a warrant to receive project tokens if the company launches a token network.
- SAFE — A SAFE (simple agreement for future equity) is a Y Combinator-style instrument that invests capital now in exchange for shares later — typically at a priced equity round — without accruing debt interest.
Common questions
Short answers for founders, LPs, and operators