Understanding SAFT and SAFE in the US

A simple agreement for future tokens (SAFT) is basically an investment contract created by crypto developers for accredited investors. Since SAFTs are viewed as security instruments, they need to be filed with the SEC. On the flip side, a Simple Agreement for Future Equity (SAFE) lets investors who put money into a startup convert that cash into equity down the line, as long as certain conditions are met. For instance, the startup might state in the agreement that they need to hit specific targets before handing out that equity. I've been curious about how US startups manage to get funding and register with the SEC. While SAFT and SAFE make it easier to pull in funds and register with the SEC, there are definitely some other challenges to keep in mind. Rule 506(b) of Regulation D is often seen as a "safe harbor" under Section 4(a)(2). It lays out clear criteria that companies can follow to meet the requirements of the Section 4(a)(2) exemption. Companies using Rule 506(b) can raise as much money as they want and sell securities to an unlimited number of accredited investors. But there are some restrictions: no general solicitation or advertising to promote the securities, and they can’t sell to more than 35 non-accredited investors.