Y Combinator co-founder Paul Graham pointed out that U.S. investors can directly invest through SAFE issued by the YC system, simply by verifying the company name and amount, as the text is locked to the same set of standard terms.

Stripe CEO Patrick Collison recounted the fundraising experience of a German founder: according to German notary law, investment contracts must be read in full by a notary. Reading a 90-page contract takes a whole day, with notary fees reaching 30,000 euros. The founder's first company was established in Germany, while the second company chose not to register in Germany.

YC launched SAFE at the end of 2013, introduced by partner Carolynn Levy, to replace convertible notes. The document is typically only about five to seven pages long, with no interest, no maturity date, and no repayment obligation, commonly only negotiating a valuation cap; post-money SAFE can instantly calculate the proportion of equity sold. YC claims this tool has been used by nearly all YC startups and many non-YC companies, raising over $15 billion for YC portfolio companies.

YC now has an official tool called "Send a SAFE" that can generate, sign, and send documents in about two minutes. U.S. companies can use three versions of post-money SAFE and optional side letters for pro-rata rights; Canadian, Cayman, and Singapore companies have separate templates. The template header states that both parties agree not to alter the main text except to fill in the blanks, allowing investors to compress due diligence to verifying names and numbers.

YC's standard investment is $500,000: $125,000 in post-money SAFE for 7% equity, and another $375,000 invested in a SAFE with no cap and most favored nation clauses, retaining pro-rata rights for subsequent rounds. This structure contrasts with the lengthy custom contracts in Germany that require mandatory reading.

In market mechanics, U.S. seed round buyers are accelerators and angels accepting standard future equity certificates, while sellers are founders of Delaware C corporations; this round of discussion was triggered by the case of German notary costs, representing an event-driven institutional comparison. Funds flow faster into jurisdictions where text is locked and can be electronically signed. Beneficiaries are early U.S. founders and scalable seed capital, while those under pressure are the continental establishment paths reliant on individual reviews and mandatory notary fees.

Source: Public Information