the SAFEs when they convert into shares will piggyback on the terms that has been negotiated with the lead investor in the price round.

a SAFE is not debt

the pre-money valuation plus the amount of money raised equals the post-money valuation of the company.

an uncapped SAFE, which basically just says, "I'm going to put money in now as an investor and when you do a priced round, I'll get the same price as the priced round investors are going to get."

there's a SAFE that's uncapped with most favored nation clause, which is basically what that says is, "I'm not going to agree a cap right now, but if you raise some money from some other investors who do have a cap and those terms are better than my terms, I get their terms as well as an investor."

By far the most common is just the valuation cap only.

things change through the company and it's totally fine to have different caps because as you can see from here, you just calculate everything separately and then add it all together.

it's really important to keep track of how much you've sold on your SAFEs

usually, you'd see that the option pool is about 10%. It might go up to about 15%. But anything more than that is fairly non-standard.

in the priced round where you have or where the company has raised money just on post-money SAFEs, and then has raised a price round, three things will happen.

the first thing that happens is the SAFEs convert into shares, then an option's pool is increased or created if there isn't one already, and then the new investors invest.

when the new investors invest and they calculate their price per share, the calculation includes the shares from the conversion of the SAFEs. So, even though the SAFEs themselves are referred to as post-money SAFEs, that's talking about how the SAFEs convert. This sentence where the SAFEs are included in the pre-money is talking about how the series A price is calculated.

if the priced round is higher than the cap, then the SAFE converts at the cap, which means that the SAFE holders basically get more shares for the same amount of money than the series A investors get.

"If the cap is higher than the priced round, then they just use the priced round price to calculate their shares."

try not to have a combination of SAFEs and convertible notes just because it makes things a little bit more complicated in the calculations. So, if you start raising on debt, then probably stick with it, but ideally, start with SAFEs because it's actually making your life a little bit easier.

When you're raising money on SAFEs, don't try to over-optimize for the cap.

fundraising is not the be-all-and-end-all, it's a means to an end. So, just don't try to over-optimize, don't try to push this up too far

in conclusion, use post-money SAFEs where you can. Hopefully, all of you can use those going forward. Understand what you're selling with the company. So, make sure that you keep track of your dilution and understand where the company is being sold. And finally, again, don't over-optimize for valuation caps because it doesn't actually make as much difference as you think it's going to make.

when you're raising money on SAFEs, you don't necessarily need a lead investor.

At the priced round stage, it is important that you have a lead investor because there's so much to negotiate that you don't want to be negotiating with a bunch of people.

in pretty much any series A round, the lead investor is going to want round 20% and the total amount sold of the company is going to be around 25%. The options pool is going to be around 10% post-money. So, that's already 35%.

this is a fairly standard cap table about 15% on SAFEs, about 25% to the lead, to the series A investors, and about 10% options pool with the rest of the founders.