Announcing the Safe, a Replacement for Convertible Notes

Paul Graham

YC partner (and lawyer) Carolynn Levy has created a new alternative to convertible notes, called a safe, that has the advantages of convertible debt without some of the disadvantages.  We're publishing a standard safe document for all startups to use, and we expect most future YC startups will use this when raising money.

"Safe" comes from "Simple agreement for future equity." Although the name is an acronym, we got tired of typing "SAFE" all the time when talking about it, and we've already switched to lowercase.

Carolynn wrote the standard series AA equity financing documents that we and Wilson Sonsini published in 2008.  In 2010 we advised startups we funded to switch to convertible notes, which have since become the norm, and Carolynn wrote the standard convertible note documents that we offered to YC startups to use when fundraising. (We made those available on Clerky, but we didn't publish the text separately online; sorry about that.) Convertible notes made fundraising a lot easier, but there were still a few things about them that were inconvenient.  So Carolynn has created a replacement that is essentially convertible debt without the debt.

The advantage of raising convertible debt is that it makes fundraising quicker.  You don't have to negotiate all the details you'd have to if you sold stock to an investor.  Instead you give them the right to buy stock in your equity round when it does happen, on whatever the terms turn out to be.

The disadvantage of convertible debt is that although it's only nominally debt, the law cares what things are nominally, and there are all sorts of regulations about debt.  There has to be a term, which in California can't be too long, and there has to be an interest rate not too far from market rates.   The interest on convertible notes makes conversion complicated, and the fact that the debt has a fixed term causes extra work for both parties when it has to be extended.

A safe is like a convertible note in that the investor buys not stock itself but the right to buy stock in an equity round when it occurs.  A safe can have a valuation cap, or be uncapped, just like a note.  But what the investor buys is not debt, but something more like a warrant.  So there is no need to fix a term or decide on an interest rate.

Safes should work just like convertible notes, but with fewer complications.

Learn more about safes and download the documents here.

Clever (YC S12) Gets $10 Million From Sequoia To Provide A Standardized API For School Data

Clever launched about a year and a half ago to provide a standardized API for K-12 schools that allows them to unlock and share data with outside developers. It’s managed to get 10,000 schools signed up to use its tools since then. Now, according to our sources, the company has raised $10 million in funding led by Sequoia Capital.

The funding comes as Clever is finding ways to make schools more connected and accessible for developers. Most schools today use a variety of legacy Student Information Systems (SIS) as a way to store student data. But many of those systems tend to be outdated or custom-built, meaning that the information held within — which includes class lists, attendance, and grades — can’t be shared or accessed by outside developers.

For developers, that means integrating with individual schools on a one-to-one basis, and that just doesn’t scale. Clever, by contrast, provides a single, universal API that will allow developers and education companies to access all the data that has been locked up in legacy silos and use it in their apps.

Brace (YC W12) launches Dropbox-powered hosting, making it easy to host and update static websites

Sometimes, all you need is a static website. Thanks to the advances in HTML5 and JavaScript, you can even offer relatively complex services through a static site. Brace, which is officially launching next week but is already available today, believes that there is a sizable market for a service that can make static hosting easier.

As Cole Krumbholz, Brace’s co-founder, told me earlier this week, the service is mostly aimed at web designers who can use it to push their work onto a live site without the need to know about setting up and managing servers. With Brace, they simply upload their files to a designated Dropbox folder and Brace will then sync it with its Amazon-hosted servers.

Read the full article at TechCrunch

Swapbox (YC W13) raises $800K with centrally located delivery lockers, available now in San Francisco

San Francisco-based startup and Y Combinator Winter 2013 class member Swapbox has raised $800,000 in seed funding, led by Tony Hsieh’s Vegas Tech Fund investment vehicle and including Fuel Capital, YC founder Trevor Blackwell, Base Ventures and Ace & Company. The startup is hoping to cash in on the rise of ecommerce and home delivery, with shared, centrally located delivery lockers so people never miss a package again.

Swapbox isn’t alone with that aim, and it’s pitting itself against some heavy hitters; both Google and Amazon already have delivery pick-up initiatives in place, Amazon via its Lockers programs in select cities, and Google through BufferBox, a Waterloo-based startup it acquired last year. BufferBox recently went live in San Francisco, where it has packages accepted by local businesses. Swapbox co-founder and CEO Neel Murthy thinks there’s still room for a startup in the space, however.

“We accept any packages from anywhere. Shop online, we give you a new address and you just ship to that address,” he said in an interview. “It’s an independent platform that works for all the other ecommerce players.”

Read the full article on TechCrunch (YC S13) lets you share music tracks across iTunes, Amazon, Google Play, Spotify, Rdio and YouTube.

Competition for listeners among digital music companies is tough (and getting tougher). But while each builds a business that it hopes will stand out enough from the rest of the pack, a new startup called, incubated at Y-Combinator this past summer, is blurring those distinctions a bit, with a platform that meshes all the services together on a universal platform — a “canonical home for music on the internet,” as’s co-founder and CEO Shehzad Daredia puts it.

Bop works like this: You can search for and listen to any song on detects what music subscriptions you may have and provides tracks from those services first — currently it catalogues streaming services Spotify and Rdio, as well as free services like YouTube and SoundCloud, and paid-for download services like iTunes, Amazon and Google Play; it plans to add more. In cases where you do not subscribe to Spotify or Rdio, or the track is not available on either, a user is given a YouTube link, or a SoundCloud link. You also get options to buy and download tracks. In each case, what has done is use the digital “fingerprint” of each track effectively to map each of these services on top of each other so that you get just one option for listening to it, and one for purchasing.

Then, you can create a link to that song to share with others. That link comes back to, and as with your original listening experience, detects which services you use before serving a result.

Read the full article at TechCrunch

Homejoy (YC S10) Raises $38M for House Cleaning On Demand

Homejoy Inc. raised $38 million in new venture funding to sell professional home-cleaning services for $20 per hour online and via mobile app. 

The San Francisco startup will offer other home-related services, from plumbers to babysitters, in the future, executives said.

The $38 million in new funding comes from a combined Series A and B round. Redpoint Ventures led the Series B investment, joined by the company’s Series A lead investors Google Ventures, First Round Capital, Max Levchin and others. A graduate of the Y Combinator accelerator, Homejoy earlier raised $2 million in seed and venture funding, bringing its total capital raised to $40 million.

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To receive Broadcasts, a subscriber needs only to download the free app for iOS and Android.

Broadcasts slice through noisy social feeds and cluttered inboxes, and are only delivered to users who explicitly subscribe to the channel.

For those of you who’d like to receive YC related updates via push, we’ve set up four Broadcast Channels you can subscribe to:

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Ahead of Christmas, ZowPow (YC W14) Launches Plush Toy Controllers That Interact With Mobile Games

Like moths to a flame, kids gravitate toward iPad and iPhone games. But for parents that want their children to still be exposed to real-world toys, a new startup called ZowPow is offering a way that they can do both.

The company makes plush toys that can control gameplay.

One of their very first toys is a tiny plane that can control up-and-down movement for a paired game called “Tiny Plane,” which is published by EA’s Chillingo.

E La Carte (YC S10) Scores Deal With Applebee’s, Bringing 100,000 Tableside Tablets To All U.S. Locations

Applebee's, the largest casual dining chain in the U.S., has signed a deal with restaurant tablet hardware and software provider E la Carte, which will see it introducing 100,000 tableside tablets to its locations starting in 2014, with the rollout completed by year-end. This represents one of the largest tableside tablet rollouts to date in any private enterprise, as Applebee's serves around a million guests per day.

“Tablets are going to be in front of a lot more consumers at restaurants than they were before,” says E la Carte CEO Rajat Suri of the agreement with DineEquity, which operates the Applebee's chain as well as IHOP.

Firebase (YC S11) adds Zapier (YC S12) integration, so your apps can connect with other apps in realtime

Firebase, a real-time back-end service for managing apps, has added an integration with Zapier, a platform for connecting services such as SendMail, Twitter and Twilio. The new integration means developers can connect multiple apps without having to do any back-end server management themselves.

A developer using Firebase can now integrate apps that before would have required a fair degree of work. “You do not have to do all these small server spinups,” with the new integration, said Firebase CEO and Co-Founder James Tamplin during a phone call today. It may only be five lines of code to connect a new app with Firebase, but with that comes the need to provision a server, run it on a service and then do the maintenance and everything else that comes with doing it yourself. All that goes away with Zapier connected to Firebase.

Read the full article at TechCrunch