12 July 2021
Diff a SAFE in Google Docs
The YC SAFE is designed to be super simple and to streamline the process of raising capital for an early stage company. If you receive a document for one from an investor, it’s good to compare it with the standard YC one for changes. If there are any major changes, then things might be… unsafe. Stick to innovating on the product, not the financing.
Here’s how to diff the file in Google Docs using the Compare Docs feature:
- Open the file in Google Docs, if it’s a docx file then you’ll need to go to File > Save as Google Docs before proceeding
- Download the associated official YC SAFE docs
- Upload those files to Google Docs and convert from docx again
- In the YC file, go to Tools > Compare documents, find your investor’s doc, set “Attribute differences to” to the name of the VC, and continue
- Run through the edits and approve all the ones that are “Format”, “Add/Delete space/tab/paragraph”, while making sure you leave the ones that are “Replace”, “Delete paragraph”, and anything else
Hopefully an automated solution will be developed for step 5 will be rolled out (you can ignore formatting in Microsoft Word), however the file is short so it shouldn’t take long.
Now you can easily see any differences and repeat these steps if you received a pro-rata side letter too. While problems shouldn’t come up, this is still a great way to make sure you’re not making any unsafe moves, but do still get a lawyer to review things before you sign.