Guide · Raising equity
How SAFEs dilute founders
A post-money SAFE fixes the investor’s percentage, so each SAFE you stack comes out of your share, not earlier SAFE holders’. In our worked example, two SAFEs, a bridge note and the option pool top-up cost the founders 15 points before any new money arrives: 84.2% down to 69.2%. The $4M seed round then takes them to 56.6%.
Updated 26 October 2026 · Educational, not financial advice
The one formula for a post-money SAFE
A SAFE (simple agreement for future equity) is money now for shares at your next priced round. Most have a valuation cap: the highest company value it converts at. Some add a discount on the round’s share price. On a post-money SAFE, the standard since 2018, the cap sets the investor’s stake:
Post-money SAFE ownership = investment ÷ post-money cap
$250K on a $6M cap is 4.17%; $750K on a $12M cap is 6.25%. That stake already counts every other SAFE and note as converted, so a new SAFE dilutes you and other shareholders, not earlier SAFE holders. The pool top-up and new money then dilute everyone.
How 84.2% becomes 56.6%
The example company in our Round & Dilution Planner has 9,500,000 shares fully diluted (every option and pool share counted): 8,000,000 for the founders, 250,000 for an angel, 600,000 options granted, 650,000 left in the pool. It holds a $250K pre-seed SAFE ($6M cap), a $750K seed SAFE ($12M cap, 20% discount) and a $200K bridge note (8% for 12 months, $14M cap, 20% discount). Now it raises $4M at an $18M pre-money valuation, with the pool topped up to 10% after the round.
The new investors’ 18.2% is the dilution founders expect. The other 15 points, 10.1 to the SAFEs and note and 4.9 to the pool, are the surprise.
Who converts at what price
Each SAFE or note converts at the lower of two prices:
Cap price = cap ÷ shares the cap is spread over
Discount price = round price × (1 − discount)
A post-money SAFE’s cap is spread over all shares, options and pool plus every SAFE and note, but not the top-up: 10,798,235 shares. The round price is $18M ÷ 11,561,281 shares (top-up and conversions in) = $1.5569.
| Who | Terms | Cap price | Discount price | Converts at | Owns after |
|---|---|---|---|---|---|
| Pre-seed SAFE | $250K, $6M cap | $0.5556 | None | Cap: 449,926 shares | 3.2% |
| Seed SAFE | $750K, $12M cap, 20% discount | $1.1113 | $1.2455 | Cap: 674,890 shares | 4.8% |
| Bridge note | $200K + $16K interest, $14M cap, 20% discount | $1.3641 | $1.2455 | Discount: 173,419 shares | 1.2% |
The seed SAFE’s discount is worth nothing here: its cap gives a lower price. A discount only bites when the round prices near or above the cap. The note converts its interest too; the planner spreads its cap over the shares before any SAFE, top-up included (10,263,045). Note terms vary, so check yours.
The pool top-up lands on you
Investors usually want the pool topped up before their money goes in, so it counts in the pre-money: the “option pool shuffle”. The new investors don’t pay for it; you and your earlier investors do.
Pool top-up = target % × all shares after the round − pool left today
10% × 14,130,454 − 650,000 = 763,045 shares: 4.9 points off the founders, nearly as much as the seed SAFE. With the conversions, it’s why the headline price overstates your shares:
What today’s shares are worth = round price × shares before the round
$1.5569 × 9,500,000 = $14.8M, not $18M. The $3.2M gap pays for the pool top-up ($1.2M) and the conversions ($2.0M). Compare term sheets on this number.
Post-money or pre-money SAFE
About 9 in 10 SAFEs are now post-money. The older pre-money SAFE spreads its cap over the shares before any SAFE converts, pool top-up included: later SAFEs dilute its holder too, and you carry the top-up for them. Here the pre-seed SAFE converts to 4.17% of the company with or without the seed SAFE. As a pre-money SAFE it would be 4.20% alone and 3.98% with it. Make both SAFEs pre-money and founders end with 56.9%, not 56.6%: post-money certainty costs you 0.3 points here.
What moves your number
The worked example, changing one thing at a time. Changes are worked out before rounding.
| Change | Founders after | Points |
|---|---|---|
| None: the worked example | 56.6% | – |
| Drop the seed SAFE’s 20% discount | 56.6% | 0.0 |
| Seed SAFE cap $15M, not $12M | 57.1% | +0.5 |
| Pool top-up after the new money | 57.5% | +0.8 |
| Pool target 8%, not 10% | 58.2% | +1.6 |
| Pre-money $24M, not $18M | 59.8% | +3.2 |
A $3M higher seed cap gains only 0.5 points: at $15M the discount becomes the cheaper price. Two points less pool gains 1.6.
What’s normal in 2026
Our reading of public data as of October 2026 (sources below). Use it as a sense check, not a quote.
| Term | Typical | What to look for |
|---|---|---|
| Instrument | 93% of pre-seed rounds on Carta were SAFEs in Q2 2026; about 91% of SAFEs were post-money (Osler, 2025: 90.7%). | Check which one you’re signing. |
| Valuation cap | Median post-money cap about $10M on $250K–$1M rounds and $15M on $1–2.5M (2025); $35M on SAFEs over $2.5M (Q2 2026). | Moves your dilution most. Agree it first. |
| Discount | 73% of post-money SAFEs had a cap only, 21% both (first half of 2026). Median 20% where there is one (Osler). | Only bites near or above the cap. |
| Option pool | Median about 12% after seed; 15–20% is almost always too large (Carta). | Size it to about two years of hires. |
| Founder ownership | Median founding team owns 56.2% after seed, 36.1% after Series A (Carta). | The example’s 56.6% is close to the seed median. |
Before you sign
- Count fully diluted. Options granted and the unissued pool count, or every percentage looks better than it is.
- Model every SAFE together. Each new post-money SAFE comes out of you and existing shareholders. Put it on the cap table before you sign.
- Agree the cap first. It moves your dilution more than the discount or the SAFE type.
- Size the pool to a plan. Bring the hires you’ll make before the next round. Every unused point was yours.
- Ask for the top-up after the money. The new investors then share its cost: 0.8 points here.
- Get the conversion checked. Side letters and the term sheet can change the maths. Have a lawyer check it against the signed documents.
Run your own numbers
The Round & Dilution Planner does this on your cap table: every SAFE and note converted at the right price, the pool top-up, what your shares are really worth and what you own after. Free covers up to three SAFEs or notes, post-money or pre-money. Pro, a one-off $79, adds unlimited SAFEs and notes, a pool sized from your hiring plan, the top-up after the money, exit payouts with liquidation preferences, every line of fine print with what to say, and an investor-ready PDF and Excel. All three tools: $99.
Sources
- Y Combinator, Post-money SAFE user guide, version 1.2, 2023
- Carta, Valuation caps on new SAFEs keep getting bigger, August 2026
- Carta, State of Pre-Seed: 2025 in review, February 2026
- Carta, Push back on 20% option pool requests, 2025
- Carta, Founder Ownership Report 2025
- Osler, 2025 Deal Points Report: convertible securities, 2026
- McLane Middleton, Pre-money vs post-money SAFEs, August 2026
The worked example’s numbers come from the Round & Dilution Planner’s example company, checked by hand. Conversions follow the YC post-money SAFE and common US practice. Educational estimates, not financial, legal or tax advice. Always check against your signed SAFEs and your lawyer’s cap table.