This document applies to the following Creator Awards’ event(s): London, San Francisco, Berlin, Jerusalem, Shanghai, Mexico City and Nashville.
If I win a Creator Award, how will I receive my prize?
Creator Awards prizes vary depending on what type of company you are. Artists and nonprofits will receive cash prizes, while entrepreneurs, startups, and other for-profit companies will receive Simple Agreement for Future Equity structure Investment from WeWork.
What is a Simple Agreement for Future Equity structure Investment*?
The agreement itself states that an investor (in this case WeWork) will invest money in a company (in this case any for-profit Creator Awards winner), in exchange for the right to purchase stock in a future equity round.
(Need a visual explanation? See here for an infographic about Simple Agreement for Future Equity structure Investment.)
I’m a small business owner, and I will not be seeking a round of funding or an IPO. Do I still have to take a Simple Agreement for Future Equity structure Investment?
Yes. However, as long as there is no “liquidity event,” “equity financing,” or “dissolution event,” you can continue business as usual without WeWork owning any stock in your company.
What happens if I sign a Simple Agreement for Future Equity structure Investment and then my company goes under or declares bankruptcy? Would I need to pay WeWork back?
In a “dissolution event,” WeWork would not hold a security interest in your company; dissolution rules specific to your jurisdiction of organization and entity type would apply. To the extent that there are funds available for distribution to equity holders, your company would be required to pay WeWork back before any payments to stockholders. However, we’d like to emphasize that in a “dissolution event” scenario, it’s generally unlikely that there would be any funds left to distribute to WeWork (or any other equity holders).
Can we negotiate the Simple Agreement for Future Equity structure Investment?
While we understand these kinds of decisions are typically complex, we’ve carefully chosen a structure that we’re confident will be the most helpful and flexible for winners, and that can be signed easily without modifications. To keep things streamlined and help winners access their prizes quickly and fairly, the Simple Agreement for Future Equity structure Investment is not negotiable. All for-profit winners will be signing the same Simple Agreement for Future Equity structure Investment agreements with the same terms.
How will my Creator Awards application be judged?
Your application will be judged on the following guidelines: 1) Creativity. How original is your approach? 2) Innovation. Are you bringing a new perspective to light? 3) Capability. Do you have a plan for executing your goals? 4) Impact. What impact does your business have on the community?
Does my business need to be a certain corporate form to be eligible for a Simple Agreement for Future Equity structure Investment?
For the purposes of properly executing a Simple Agreement for Future Equity structure Investment agreement, you will need to either be a C-Corp or LLC for the majority cities (and LTD for Israel)
I am based in a Creator Awards eligible country outside of the US but have a US-corporate form (e.g., Delaware C-Corp), what agreement would I enter into if I win?
If your parent company is US-based (i.e. not a subsidiary), as long as your principal place of business and operations is in a Creator Awards eligible country, your company can apply to that country’s Creator Awards and you would be eligible to enter into a US SAFE Agreement. Otherwise, you would sign the applicable regional investment document.
For example, if your business is based in Brazil but your parent corporation is registered in Delaware, you can apply to the Brazil Creator Awards and would receive your funding through a US SAFE agreement. If you are a Brazilian company registered in Brazil, you would receive your funding through the Brazilian investment document.
*These materials are provided for informational purposes only. These materials and the information and content contained herein are not offered as legal advice and should not be construed as such. The descriptions contained in the materials, including regarding any transactions, results, or potential outcomes, are not intended to suggest or guarantee that similar results can or would be obtained in any particular matter or scenario. These materials are not intended to serve as a comprehensive discussion of all the potential issues, considerations, factors, or concerns that may apply to your particular circumstances. You should seek professional legal and tax advice before using, acting on, or relying upon any information contained in these materials. For more information about Simple Agreement for Future Equity structure Investment, please review the Y Combinator Simple Agreement for Future Equity structure Investment primer, which is available at https://www.ycombinator.com/documents/ and the SEC Investor Bulletin available at https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_safes.