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This is the side-by-side numbers piece: three investors each putting in $1M at a $10M cap end up owning exactly 30% of you under post-money SAFEs, but only about 25% under the old pre-money version because the SAFE holders share the dilution instead of you eating all of it. Seeing the same raise cost you 5 extra points depending purely on which version is on the paper is the fastest way to internalize why you read the header before you celebrate the cap.
Pre-money vs. Post-money SAFEs: The Dilution Math Founders Miss
From Avisen Legal by Avisen Legal 10 min read
- Same raise, same cap: post-money costs you 30% while the old pre-money split the same dilution across SAFE holders and cost you around 25%
- Under post-money, new SAFEs never dilute earlier SAFE investors, only you, which is why the version on the paper is not a detail
- The cap alone tells you nothing until you convert it to the ownership percentage it implies at your expected raise size
