What a SAFE actually promises
A SAFE is a promise about a future price. Read the cap and the discount first.
In short. A SAFE converts at the next round. The cap matters more than the discount. Stacked SAFEs dilute more than founders expect.
A SAFE is quick to sign, and that is its risk. Three of them, signed over a year at different caps, can take more of the company than a priced round would have.
| SAFE at €4m cap, €200k | 5.0% |
| SAFE at €5m cap, €300k | 6.0% |
| SAFE at €6m cap, €400k | 6.7% |
| Total before the round | 17.7% |
E. Brandt
Weiter.
Go deeper · The numbers
Cap table: three rounds, simulated
Change one assumption and watch the founders’ share move.
Become a member · $5 a monthKeep reading · The words
Dilution, counted honestly
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