PSA: Sign Your Board Consent Before You Sign SAFEs

It's the single cheapest thing you can do to keep BigLaw's billing machine from feasting on your next financing.

By Jessica, Founder & General Counsel, Story.law

This isn't legal advice, and it isn't really the kind of thing I usually write up either. But it's a reality check I feel obligated to offer, given how much legal spend it wastes and how much founder frustration that spend creates. It's also, I think, a restatement of law so settled that no lawyer could reasonably disagree with it.

TL;DR

Your board generally has to approve any issuance of securities — SAFEs included. All you need is a board consent authorizing you to raise on SAFEs up to some stated maximum amount, signed before you start signing SAFEs.
A lot of founders skip this. The SAFE template you're using isn't the same thing as the legal process for issuing it, and that gap is where a lot of diligence pain gets born.
Catch the gap early, and it's a trivial fix: a short retroactive board consent, done in minutes, that investor counsel routinely accepts without complaint.
Miss it until you're mid-financing, and it turns into a persistent "red flag" that both sides' lawyers will discuss, escalate, and bill for — easily $5,000 or more, for something a two-minute consent would have prevented.
The fix costs nothing and takes less time than reading this post. Want a free board consent template? Email me at j@story.law.

The Rule Everyone Skips

Your board generally needs to approve any issuance of securities, and that includes SAFEs. Literally all you need is a board consent saying you can raise on SAFEs up to some stated maximum amount, signed before you start signing them.

Contrary to what a lot of "AI-native legal" products want you to believe, the operative document template for a SAFE is not the same thing as the proper legal process and order of operations for taking a SAFE investment. That gap seems to be where most of the diligence pain gets born.

How Founders End Up Without One

Somehow, founders end up signing SAFEs all kinds of ways — including through YC's own tooling, "without the burden of lawyers" — with no board consent anywhere in sight.

This is easy to do. Basically every platform hands you a SAFE template to use, and, to be honest, a lot of these tools mess up the signature blocks materially — but that's a separate issue. These platforms can't give you legal advice, so they can't tell you that you need a board consent first. But you do. The SAFE issuance isn't technically valid without one.

The Fix Is Easy — If You Catch It in Time

Say you missed it. Good news: it's an easy fix. With no financing pending, it's usually a simple retroactive consent that takes a few minutes to put together, and I regularly see investor counsel accept that retroactive form without complaint. Some investors have even accepted a sole director-founder's signature on the SAFE as sufficient board approval on its own.

Almost Nobody Catches It in Time

99% of the time, founders don't notice the consent is missing until they're already in a deal with a term sheet in hand — and they go looking for the board consent behind some SAFE, only to discover one was never done.

Instead of a box quietly checked off in diligence and never mentioned again, it becomes a red flag and a running discussion topic. That red flag will probably cost you $5,000 or more, even though it's completely fixable. I'm not exaggerating. Here's why:

Why a Missing Board Consent Costs You $5,000+

Your investor's BigLaw lawyers, like all BigLaw lawyers, spend their careers hunting for new things to bill for — and new ways to bill more time for the same things — and you just handed them one. They'll turn it into a discussion, then follow up with rounds of long emails "gently" reminding your lawyers that it's still missing. Everyone bills to read and respond to that list. Investor counsel bills to annotate the cap table separately for every SAFE that lacks a board consent, which slows down the whole cap table tie-out. You can easily pay $1,000 over the course of one deal for the time your lawyer spends typing some version of "we expect to handle this as part of the board consent we're doing for the transaction," over and over.
Remember: in most financings, you're paying up to some threshold of your investor's legal bills too. So this wasted time costs you even when your own lawyers do nothing differently.
It's never just one lawyer for you and one for them talking about this. It's five lawyers on their side and one to three on yours, and everyone bills by the hour. It's far from the only silly thing those eight people spend time agonizing over — but it adds to the pile.
The moment financing starts and you're missing this consent, BigLaw can find 400 ways that ambiguity makes other checklists uncertain — like which SAFEs are valid enough to convert, or exercise pro rata rights. Now there's billing to discuss the checklist, too.
BigLaw will bill to ask about your missing board consent, to add it to lists, and to hold a call about whether the retroactive approval will be acceptable. Your own counsel will bill to respond. And if your own counsel is BigLaw too, they have the same incentive to talk the missing consent to death — even though everyone already knows how the story ends: a retroactive consent.
Sometimes your own counsel just gets tired of talking about it and drafts the retroactive consent separately — and bills for that, too.
Sometimes the botched signature blocks you got from a free automated tool cause their own multi-thousand-dollar email exchanges. I've seen a bill from WSGR for a Series A where a first-year associate billed 20-plus hours at $800 an hour to "update signature pages." I've seen $3,000 billed across four attorneys to confirm that a blank "Title" line and a hand-drawn signature were, in fact, fine — because the $900-an-hour associate who billed to "review" the SAFE missed that it had already been signed the first time around.

Perhaps the craziest part is that the bills themselves won't say any of this out loud. You'll see line items like "email correspondence" or "call with investor counsel," which — correctly and intentionally — don't say "talked about that missing board consent" anywhere. Maybe it took ten minutes of an hour-long call. But that ten minutes costs somewhere between $1,700 and $3,500 in combined legal fees, split across both sides.

The Two-Minute Fix

This is entirely preventable. Approve SAFEs as a board, up to a stated cap, before anyone signs one — literally, a second before is enough. You can't stop the BigLaw billing machine, whether it's billing you directly or billing the investors whose legal fees you end up reimbursing. What you can do is not feed it. That takes about two minutes: sign the consent.

If you already have lawyers helping you raise, they — or we, if that's us — should be making sure this happens automatically. If you don't, I'll give you my form of board consent for free. No questions asked, no strings attached. Just email me at j@story.law.

Disclaimer: I won't fill out the template for you unless you're a client — in which case, doing exactly that is just part of how we already work by default. This post, and the offer in it, isn't legal advice, and I'm not your lawyer unless you've actually engaged Story LLP.