When setting out the terms for the new NDRC Accelerator we wanted to strike a fair balance between being attractive to entrepreneurs while also ensuring an economic return across the NDRC portfolio.

In coming to our decision, we carefully considered various key NDRC objectives while also discussing the terms with key stakeholders across the Irish tech ecosystem including experienced VCs, Angels, and entrepreneurs.

Our first decision was to adopt a SAFE (Simple Agreement for Future Equity) originally introduced by Y Combinator (YC) in late 2013. Since then, SAFEs have been used by almost all YC startups and countless non-YC startups as the main instrument for early-stage fundraising. These are increasingly common in Ireland and all the investors we spoke to have used them themselves.

There are numerous reasons for adopting the SAFE, but the most obvious is their simplicity and ease of understanding. There are essentially only two terms to negotiate — the valuation cap and discount. This allows them to be simple to prepare and execute without substantial legal costs. Furthermore, they make it easy for follow-on investors to understand. 

We believe that adopting a SAFE also demonstrates Dogpatch Labs’ (as operator of the NDRC) desire to set a positive example for early-stage investment in the Irish ecosystem. A full explanation behind the adoption of the SAFE can be read here.