Raise money

Valuation, SAFEs & term sheets

Understand the paper before you sign it.

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What's the difference between a valuation cap and a discount on a SAFE? A cap sets the maximum valuation at which your SAFE converts, protecting the investor's upside if you raise your next round at a high price; a disc... Intermediate 3 resources → How is my startup's valuation actually decided at the early stage? At seed there's no spreadsheet truth; valuation is set by market comps, your traction, the strength of the team, and mostly by supply and demand fo... Intermediate 3 resources → How much dilution should I expect across seed and Series A? Plan for roughly 10-20% dilution per priced round plus the option pool, and remember that stacked SAFEs at different caps all convert at once and c... Intermediate 3 resources → Post-money SAFE or pre-money SAFE: which one am I actually signing and why does it matter? YC's post-money SAFE (the standard since 2018) locks the investor's ownership percentage the moment they sign, which means every new SAFE you add d... Intermediate 3 resources → Can I even use a SAFE in India, or do I have to do a CCPS or convertible note? A US-style SAFE has no clean legal home under Indian company law, so most Indian-incorporated startups raise early money through Compulsorily Conve... Intermediate 3 resources → Should I raise on a SAFE or just do a priced round at seed? Raise on a SAFE when speed and low legal cost matter and you're taking money from a handful of angels, because you skip the negotiation and lawyer ... Intermediate 3 resources →
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