Y Combinator invented a 2-page document that replaced lawyers in fundraising

Before 2013, early-stage fundraising was a nightmare. Founders needed lawyers to draft convertible notes with complex terms — interest rates, maturity dates, conversion discounts. It cost thousands in legal fees before the company even had revenue.

Then Y Combinator created the SAFE (Simple Agreement for Future Equity). It's a 2-page document that says: "I give you money now, and I get equity later when you raise a priced round." No interest. No maturity date. No lawyers needed.

SAFEs have a valuation cap (the max price at which your investment converts to equity) and sometimes a discount (you get shares cheaper than the next round). The post-money SAFE, introduced in 2018, made it even simpler by clearly defining how much of the company each investor owns.