SeriesSAFE and RUV Conversion FAQ

You hold a SAFE in Play Money Studios. We're asking you to join our roll-up vehicle — this is what they call an SPV when the founder runs it — so we don't have to manage 105 individual investors on our cap table.

In exchange, we convert your SAFE into Series SAFE Preferred Stock, a new instrument that carries the same economic terms ($5M post-money valuation cap) but has the tax advantages of equity. The SPV manages the investment on your behalf, just like every other investment you've made on Play Money.

All steps happen at once. One signature puts it in motion.

No. There are no additional fees or tax implications.

Qualified Small Business Stock, Section 1202 of the Internal Revenue Code. If your equity qualifies, you can exclude up to $10 million (or 10x your cost basis, whichever is greater) in capital gains from federal income tax when an investment exits or you sell. On a successful exit, QSBS is the difference between paying capital gains tax and paying nothing.

The conditions for a QSBS-eligible investment include:

• Domestic C-corp
• Gross assets under $50 million at the time stock is issued
• Direct purchase, not secondary shares
• Active trade or business

Your Play Money investment meets all these conditions.

You also need to hold the stock for 3–5 years to qualify for varying levels of tax exemption.

And that's the catch. SAFEs live in the QSBS gray area.

Some people interpret SAFEs as equity and think their QSBS holding period starts on their original investment date. The more conservative interpretation is that since SAFEs are not equity (just the promise of equity), the QSBS "clock" doesn't start ticking until they convert to equity at a priced funding round, often many years after the original investment date.

SeriesSAFE is a new investment instrument designed to clear up this QSBS ambiguity. It is as easy to use as a SAFE but counts as QSBS-qualified equity on day 1.

The Series SAFE Preferred Stock was designed by Amit Singh at Mintz specifically to mirror YC post-money SAFE economics. I spent an hour with Amit this winter. He gets it.

What stays the same:

• Your Purchase Amount (now called "Investment Amount") carries over dollar-for-dollar.
• Your $5M valuation cap carries over.
• Conversion at a priced round: same "better of" math as the SAFE.
• Liquidation priority: senior to common stock.
• Dissolution protection: you get back at least your Investment Amount before common holders.

What changes:

• Form. A SAFE is a contract. Series SAFE Preferred is actual stock, written into the Company's charter. That's what makes it unambiguous for QSBS.
• Voting. Series SAFE Preferred is non-voting except where Delaware law requires it. SAFEs don't carry voting rights either, so this is a wash.
• Dividends. Series SAFE Preferred holders receive proportional dividends if the Company pays them on common stock. Your SAFE had no dividend provision. (We don't pay dividends, so this is theoretical.)

Bottom line: the economic terms are identical. The form changes from contract to stock. You gain QSBS clarity. You don't lose any economic protection.

You benefit because your investment in Play Money is no longer in the QSBS gray zone. It's equity and your hold period counts towards the QSBS time period no matter if or when Play Money raises a larger priced investment round.

You also benefit because you help us "clean up our cap table," which makes us a better-run company long term.

We have 100+ individual angels. That's 100+ lines on our cap table and 100+ individual signatures required for every future corporate action. The SPV consolidates all of that into one line item. Cleaner cap table, faster fundraising, less overhead.

These are company benefits. They're also investor benefits. A company that can move fast on corporate actions is a better-run company.

And let's get real. We literally automate SPVs for a living so founders don't have to manage hundreds of individual investors on their cap tables. But we are walking around with chaos on ours. It's not a confidence builder for a new VC.

No. Your Purchase Amount, $5M post-money valuation cap, and ownership stake remain the same.

The transaction is structured to preserve your original investment date.

The new Series SAFE Preferred is deliberately structured as equity, and the QSBS clock will start ticking when this transaction closes.

We've also structured the transaction so that if the IRS or your tax advisor takes the position that your original YC SAFEs were QSBS eligible, you have a claim to your original investment date.

We can't provide tax advice. SAFEs and QSBS is a well-known gray area. And preservation of your original investing date may or may not be advantageous based on when you invested, the changes to QSBS in the OBBA, and how long it takes us to deliver an investor return. Think of this as you now have the best of both worlds optionality.

Yes. The SPV appears on the cap table as one stockholder. You appear on the SPV's membership register. This is like every other investment you made on Play Money.

There is a lot of chatter about "being on the cap table," but frankly it rarely matters, and when it does it's usually because there is a pile of confusing documents in your inbox that the company is nagging you to sign.

Here's the secret. Play Money has raised over $800K. No individual angel has the voting power to sway what the company does. Most small investors on the cap table get "dragged along" with the majority.

Right now, Cheryl Kellond does. Because the founder is rolling up her own investors into an SPV, the founder will make decisions on behalf of the SPV. This is common.

The Investor Agreement allows a Governing Committee to be established at any time to oversee decisions the SPV makes as a stockholder. We want to do this one day, but we are not mandating it because it is not the most important thing we could be doing with our time right now.

Nothing happens. Your SAFEs will remain in place just as they are.

But by not signing, you pass up the opportunity to exchange your existing SAFE for a QSBS-qualified Series SAFE. And you chose to stay directly on the cap table instead of helping set the team up for lower administrative costs and burden.

We need all signatures in by Monday, May 31, 2026.

We have to authorize and issue all the new Series SAFE stock at the same time and admit everyone to the SPV at the same time. If your acceptance isn't received in time, you'll be left out. There is no second chance.

All you need to do is sign. We do everything after that.

By signing, you grant a power of attorney that authorizes the Company to execute closing documents on your behalf.

Behind the scenes, we:

1. File the charter amendment with the Delaware Secretary of State.
2. Execute the Exchange and Contribution for all participating investors simultaneously.
3. Update the cap table and send you a confirmation email.

The investment agreement on your Play Money dashboard will be replaced with the new agreement you are signing as part of this transaction. You will manage this investment like any other investment on Play Money.

Two things.

1. Read the Investor Agreement. (Do not torture yourself reading the Subscription Agreement and LLC Agreement. They're standard fund formation documents that your signature page covers automatically.)
2. Sign. One Signature Page covers everything.

Most importantly, respond promptly, especially if you have any questions. We need all signatures back by May 31, 2026.

The link is in the email we sent you.

Sigh. Two reasons.

First, right out the gate we didn't have the ability on the platform to manage an SPV with different closing dates and investors coming in months apart from each other. We were raising money "in real time" in those early days.

Second, by the time we could run a "rolling SPV" it didn't make sense to have our investors in two different pools. We had the same issue to solve AND we thought there was an easier way to solve it that didn't involve getting each individual angel to agree to the SPV. We were wrong.

We appreciate all your support to date. Agreeing to join the SPV is going to be a huge help to us going forward. And I hope you appreciate the extra effort that went into the SeriesSAFE opportunity. It's there to sweeten the pot and as a thank you. — C2K