Funding Your Photography & Videography Business: SAFE, Convertible Note, or Priced Equity?
Getting the right cash for your photography or videography business is key. Maybe you need a new Sony A7S III camera, a drone for aerial shots, or funds to hire more editors for wedding season. How you get that money matters a lot. A SAFE is simple, a convertible note adds debt, and a priced round means giving up a piece of your business now. Each choice changes how your business grows and who owns what down the line.
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The Quick Answer
For photographers and videographers, a SAFE (Simple Agreement for Future Equity) is usually the best first step. It's fast and cheap, perfect for small boosts like buying new prime lenses or upgrading your editing software. If your family or local investors aren't familiar with SAFEs, a convertible note might be clearer to them because it's like a loan. Save a full priced equity round for when your business is really taking off, bringing in solid yearly revenue, and you need a big sum (like $200,000+) to open a full studio or expand to multiple cities.
Side-by-Side Breakdown
SAFE: This is not a loan. It has no repayment deadline and no interest. It turns into ownership stakes later when your photography or videography business gets its first major investment. You often get a discount (like 15-20%) on that future investment price or a cap on how much your business is valued at that point. It's quick to set up, often in days. Legal costs are low, typically $1,000-$3,000. Your investor doesn't get a say in how you run your business day-to-day.
Convertible Note: This is a loan. It has a due date, usually 18-24 months out. It builds up interest, often 5-8% each year. It converts to ownership later, just like a SAFE. But if your business doesn't hit its targets or raise more money before the due date, you have to pay back the loan with interest. This makes it riskier. Legal fees are higher, often $5,000-$15,000.
Priced Round: This means investors buy actual ownership in your photography or videography business at a set price per share today. They get preferred shares, giving them special rights. The main investor often gets a seat on your business's board, helping make big decisions. Legal costs are much higher, $20,000-$50,000 or more. It takes a long time to finish, sometimes 6-12 weeks. This is for when you're looking for serious growth, like opening new branches or buying a whole fleet of cinema cameras.
When to Choose a SAFE
Choose a SAFE if you're raising smaller amounts, like $10,000 to $100,000, from individual investors, friends, or family. This is perfect for buying a new lens kit (like a Canon RF 28-70mm f/2L), upgrading your drone (DJI Mavic 3), or funding your marketing budget for wedding season. It lets you get money quickly as each investor commits, without waiting for everyone. If your investors are comfortable with a simple agreement that delays setting a business value, this is your best option. It keeps legal costs low so you can spend money on gear or bookings, not paperwork.
When to Choose a Convertible Note
Pick a convertible note if your potential investors, maybe a local business owner or an older relative, prefer a loan agreement over something that sounds like an equity sale. They might understand 'I'll lend you money, and you'll pay me back or give me a piece of the business later' better than a SAFE. It can also be useful if you need to push for a big next step, like launching a new real estate photography service within 18 months, and want the loan's due date to add pressure to achieve that goal and attract more investors.
When to Choose a Priced Round
Only go for a priced round when your photography or videography business is clearly successful, bringing in consistent revenue (e.g., $500,000+ per year) and you have a strong list of past clients, like 50+ weddings or major commercial contracts. This is for raising larger amounts, maybe $200,000 or more, to open a multi-studio operation, buy high-end cinema cameras (like ARRI Alexa Mini), or expand into a new market. If a big investor wants to put in a lot of money, they'll likely insist on a priced round to clearly define their ownership and control from day one. This also sets up a clear structure for hiring a large team or selling part of your business later.
The Verdict
For most photography and videography businesses, especially when starting out or looking for under $200,000, the SAFE is the best choice. It’s simple, cheap, and keeps things moving. Use the standard Y Combinator SAFE agreement; just discuss the valuation cap and discount with your investors. Only consider a full equity priced round when your business has significant, proven success and a major investor is ready to put in substantial capital with a clear valuation.
How to Get Started
SAFE: For a SAFE, go to ycombinator.com/documents and download the Post-Money SAFE agreement. Fill in the specific numbers for your valuation cap and discount rate. Have a lawyer experienced with startups look it over once. Then, use this same document for all small investors. Expect legal costs around $1,000-$3,000.
Convertible Note: To create a convertible note, you'll need a startup lawyer to draft it. Be prepared for legal fees around $5,000-$10,000. Make sure you understand and agree on the interest rate, when the note is due, the discount rate, and the valuation cap with your investors.
Priced Round: For a priced round, hire a lawyer who specializes in venture capital deals. This is a complex process. From the time you agree on terms to getting the money, it can take 6-10 weeks.
RECOMMENDED TOOLS
Clerky
Online legal setup for SAFEs and fundraising documents
Carta
Cap table management and equity administration
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FREQUENTLY ASKED QUESTIONS
What is a valuation cap on a SAFE?
A valuation cap sets the maximum valuation at which a SAFE converts to equity, regardless of the actual valuation of the priced round. If you raise at a $10M cap and your Series A values the company at $20M, SAFE investors convert at $10M — getting twice as many shares as Series A investors for the same investment.
Does a SAFE show up on my balance sheet?
Yes. SAFEs appear as a liability on your balance sheet until they convert to equity. They are not classified as debt, but they are not yet equity either. This nuance matters when fundraising from investors who read balance sheets carefully.
Can I have multiple SAFEs with different caps?
Yes — this is called a rolling close and it is common. Each SAFE converts independently at its own cap and discount. Keep track of the dilution from all outstanding SAFEs in your cap table model.