
Can a Startup issue a SAFE for non-cash benefit? - aperera
I incorporate a Delaware C-corp and would like to engage an offshore company to develop the technology. Since I do not have cash to pay them, I offer them a standard YC post-money SAFE for say $50K. Then for the &#x27;Purchase Amount&#x27; I sign another agreement with them, that I will purchase engineering services from them for the $50K.<p>So I do not exchange cash. But bottom line, I offer them payment via stock with a standard SAFE. Is this possible?
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api
I don't see why not, but be sure you are actually getting $50k worth of
engineering services. That seems super-risky. There's a whole population of
weird bottom feeders that try to snag equity in early companies by promising
the moon to founders and once they have a contract not delivering much if
anything. I don't know if these creatures make any money but they do leave a
trail of messy crap in cap tables that real investors don't like.

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aperera
Thank you. My question was more about if it was required by any means that the
'Purchase Amount' should be deposited to a bank account first etc for a SAFE
to be recognized as legal and issued. Actually the offshore company is under
my control, so I have no worries on it, but since it will actually need to
spend money to hire and pay engineering team to develop the technology but IP
needs to be given to the US based startup to secure funding later on

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techslave
that’s yucky. you’re messing up your cap table (the equity is just going to
yourself) to avoid patriating money to avoid paying taxes. for the paltry sum
of $50k. just give the company a personal loan.

it’s way too early to start financial engineering.

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chews
I would not say that it is yucky, it is not that uncommon to see in startup
incubators a part of their "standard deal" is a whole bunch of services
provided at retail cost to the startup and to be paid later. This is often how
lawfirms take risk in startups, they structure it as 200K in legal services
and I've seen its expressed as a claim on their captable.

