Article · 12 min read

SAFE vs priced round at seed: which, when, and the dilution math

Causo · Causo Hub Free Intermediate

This is the cost and dilution receipt to go with the CRV framework: SAFEs run 2k to 5k in legal and close in a week, priced rounds run 15k to 40k. Then it does the math that matters, three 500k post-money SAFEs at an 8M cap quietly cost you 18.75%, not the ~6% each you'd assume, which is exactly the SAFE-stacking surprise a priced round prevents.

  • Legal fees: 2k to 5k for a SAFE versus 15k to 40k for a priced round, and a SAFE closes in about a week
  • Post-money SAFEs stack against the founder, three 500k SAFEs at an 8M cap take 18.75%, not ~6% each
  • A priced seed looks worse short term because the 10% option pool refresh hits day one, while the SAFE just defers that pool refresh to the next round
Open on hub.causo.ai ↗

The question it answers

  1. Should I raise on a SAFE or just do a priced round at seed?

Read with it

  1. This is the cleanest decision framework we found because it draws the line by cheque size, not vibes: under 1M and 1M to 2M go... CRV (Charles River Ventures) Article · 10 min read Priced Round vs. SAFE: How Founders Choose at Each Stage CRV
  2. This is the piece that makes the SAFE-vs-priced question concrete for an Indian founder, where a US SAFE has no legal standing... Dealplexus Article · 14 min read Convertible Notes vs SAFE vs Equity: Which Instrument Fits Indian Seed Rounds Dealplexus
eChai Partner Brands The partnership →