
Ask HN: Investor didn't pay up. How to cancel SAFE? - zizizizg
We&#x27;re part of a startup accelerator in NYC that is having cashflow problems. Payment was due over several tranches via SAFEs.<p>Second tranche never happened. It&#x27;s been more than a month now with nothing but excuses.<p>Is there a standard way to revoke a SAFE that is signed but never paid?
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codingdave
IANAL, but a SAFE is just a contract, isn't it? And if a party to a contract
doesn't fulfill their side, then the contract isn't enforceable.

Odds are there is nothing that needs revoking. That being said, I have no idea
what your contract says, so it is always wise to ask a lawyer, not us folk on
the internet who aren't.

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rboyd
My reading may be off but it sounds like the investor may have made the first
payment of many. If so, might not be so cut and dry.

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codingdave
True, but if the investor stopped fulfilling their side of contract, they
cannot enforce anything beyond what was spelled out for the first payment. And
a SAFE is, to my understanding, rights given to the investor for future
funding rounds. So if there was no additional consideration needed to get that
first payment... it really might be that cut and dry.

But again, it depends on what the contract actually says, so... they should
still ask a lawyer.

Keep in mind that contracts, in general, aren't enforceable on their own to
begin with. They are documentation of agreements that could be used to help
decide conflicts in civil court, to get a court order that is enforceable. And
they therefore often end up being leverage so conflicts don't go that far. So
the only way OP has to fret over this is if they expect the investor may some
day sue them for the investment rights, even after they stopped giving them
investments.

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tnolet
The standard way would be to contact a contract lawyer or legal help in
general. There are lawyers on HN, but your accelerator should also have
contacts.

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LogicX
I'm not sure what you're expecting to accomplish now?

When you have a priced round, either their SAFE is valid and they convert, or
it's not and they don't, and they sue you if they don't agree with your
interpretation of the contract...

But until that day, what're you hoping to accomplish now?

