This new financing instrument is called SAFE (Simple Agreement for Future Equity)

Telstra-backed accelerator muru-D Singapore is launching a “startup-friendly” financing system for its new batch of 10 startups this September.

The new financing instrument is called Simple Agreement for Future Equity (SAFE). It provides an agreement that provides investment to the company on a convertible note which converts to equity when the startup does its first post-program qualifying raise at the valuation of that raise.

This process allows companies “to raise equity quickly and easily without pricing and consummating a complete equity round,” according to an article by Geektime.

“Complex terms and agreements might be expected between larger entities, but are not necessarily appropriate for startups. These new terms put muru-D’s funding structure in line with global best practice, ensuring that our startups are getting the best deal possible and can focus on growing to become sustainable global businesses,” said Craig Dixon, Entrepreneur in Residence, muru-D Singapore, in an official press statement.

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“SAFE notes will allow muru-D to attract both early and later stage startups, which we believe our program will continue to add considerable value to,” he added.

As part of its six-month accelerator programme, the Australian accelerator also provides S$60,000 (US$43,450) in upfront seed capital to the participating startups.

They will also receive six months of business support, access to a co-working space in Singapore’s central business district, a guided trip to Silicon Valley and coaching from Telstra experts.

To date, 17 startups from across Southeast Asia have graduated from muru-D Singapore’s first two cohorts.

muru-D added that eight startups from muru-D Singapore’s second cohort collectively gained 12,000 new customers and reaped revenues in excess of S$300,000 (US$216,000).

muru-D Singapore will be conducting roadshows across Southeast Asia for interested startups and investors to get more information about the program.

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Image Credit: muru-D Singapore

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