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If my SAFE converts to stock, how can I sell my shares?

  • Updated

A Crowd SAFE can convert to stock of the issuing company for a variety of reasons. When your Crowd SAFE converts to equity, such shares are restricted securities and subject to limitations on transfer. 

Equity financing: If an equity financing occurs, this can entitle holders of the Crowd SAFE to shares in the company while it is still private. These shares may be sellable on the private market, if the holder follows the rules, they are subject to (which are determined by where the holder is domiciled and where the potential buyer is domiciled), but there will be no public market at the time of receipt. 

Change of Control – Acquisition: If the company that provided you a Crowd SAFE is purchased and issues stock, it may be stock of the company or stock of the acquiror. If the company remains private these shares may be sellable on the private market, if the holder follows the rules they are subject to (which are determined by where the holder is domiciled and where the potential buyer is domiciled), but there will be no public market at the time of receipt. If the acquiror is public and you receive public stock, you can trade them on public markets, see more on that below;

Change of Control – Public Offering (IPO): If the company that issued you a Crowd SAFE goes public; your Crowd SAFE can be converted into publicly traded shares. To sell these shares, you will need to work with the issuing company’s transfer agent to have the shares sold by a broker. If you already have a broker, this will be rather simple, if you do not have a broker, you will need to retain one. If you are not located in the United States, this may prove difficult and you should talk with your investment advisers to determine if it is feasible, even if you are an expat.

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