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How much of my company am I selling in a SAFE round?

FundraisingEquity

For post-money SAFEs the arithmetic is one line: total SAFE money divided by the post-money cap is the share of the company the SAFE holders will own when they convert. $750,000 raised at a $6 million cap is 12.5 percent. If different investors have different caps, work out each one separately and add them up.

What that number leaves out

• The option pool. The priced round's lead will usually ask for an unallocated pool of around 10 percent after the round, created or topped up before their money goes in, so the existing holders pay for it.
• The priced round itself. A seed or Series A typically sells 15 to 25 percent of the company, on top of what the SAFEs took.
• Interest on notes, which converts too and adds a little to the noteholders' share.

The useful question is not what the SAFEs take but what the founders own after the round they convert in, and after the round after that. That is the number to plan around, and it is the one an experienced investor is looking at when they read your cap.

Arabella Venture Math runs this arithmetic for every round from a first SAFE to the sale, with the pool refresh at each priced round included.

Written by the lawyers who built Arabella. This is legal information, not legal advice for your situation, and reading it does not make us your lawyers. For a real dispute or a high-stakes decision, talk to a licensed attorney. More questions.