Post-Money SAFE

The 2018 form of the SAFE, in which the valuation cap is a post-money figure and each SAFE holder’s stake is therefore fixed at its amount divided by its cap, measured before the new priced round. Stacking a second post-money SAFE dilutes the founders and not the first SAFE, which is the reverse of the original pre-money form and the reason founders should count what a stack of SAFEs has promised before signing another.

How a startup is financed · 9 of 26Next: Convertible Note

Practise it

Take a company from founding through a SAFE and a priced seed round. Set the cap, the pre-money and the option pool, watch the price per share and every holder’s stake move, then check your own arithmetic against the table.

Open Cap Table Builder, free, 15 min

Where Post-Money SAFE comes up

Cap Tables, Dilution and the Option PoolEvery term that sounds like a price is an instruction about this table. Learn to redraw it by hand and most of the technical questions in a venture interview answer themselves.Read the guide — 13 min SAFEs, Convertible Notes and Their EquivalentsBefore the first priced round there is no price. These are the instruments that let money in anyway, and each one is a different answer to the same question: what is the early investor paid for the risk?Read the guide — 12 min Liquidation Preferences and Preferred Stock, ExplainedOwnership is a fraction. A preference is a choice. Every instrument a venture investor holds is a different rule for making it, and the exit value decides which way it goes.Read the guide — 13 min

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The venture capital hub

Related Venture Capital terms

Founder Dilution Valuation Cap Option Pool Shuffle Conversion Discount Option Pool Most Favoured Nation (MFN) Clause

How a startup is financed: keep going

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