Guide: SAFE Pre-Seed Calculator (Dilution Scenarios)
last updated: Feb 6, 2026
You think you are securing runway, but you might be signing away your control. This guide breaks down the actual math behind SAFE dilution so you don't wake up owning 10% of your own company.
TL;DR: The Cheat Code
A SAFE pre-seed calculator models how different investment instruments impact founder equity before you sign. It highlights the difference between pre-money and post-money calculations, preventing accidental excessive dilution.
How to read this: Use the table below to compare your offer against standard scenarios.
- Benchmark: Founders typically dilute 15–25% in a pre-seed round (Source: Carta).
- Rule: Never stack multiple valuation caps without modeling the "shadow series" effect.
- Warning: The "Post-Money" clause locks in investor ownership percentage, pushing all dilution (including the option pool) onto the existing founders.
How to read this: Use the table below to compare your offer against standard scenarios.
Glossary
- Valuation cap: The maximum valuation at which an investor’s money converts to equity. It protects the investor if your company value skyrockets.
- Post-money SAFE: The standard YC instrument where the valuation cap includes the investment amount. It fixes the investor's ownership percentage immediately.
- Pre-money calculation: An older method where the investment is added to the valuation cap to determine the total post-round value. This is friendlier to founders.
- Dilution: The reduction in your ownership percentage caused by issuing new shares to investors or employees. See our SAFE vs convertible note guide for more nuance.
- Shadow Series: A specific class of preferred stock (e.g., Series A-1) issued to SAFE holders to preserve their specific liquidation preferences without distorting the main round's price per share.
Benchmarks
Founders often fly blind on what "normal" looks like. According to Carta's 2024 data, the median pre-seed dilution hovers around 20%, with a typical range of 15–25%. If you are selling more than 25% in your first round, your cap table is likely broken.
Sample Math
Let's calculate the impact of a standard raise. Assume you raise $500,000 at a $5,000,000 Cap.
1. Post-Money Math (The Trap)
Why this matters: At small amounts, 1% seems negligible. But if you raise $2M on a $10M post-money cap, you sell 20%. If that was pre-money, you would only sell ~16.6%. That 3.4% difference is worth millions at exit. Use a seed cap table builder to visualize this before signing.
Sample Math
Let's calculate the impact of a standard raise. Assume you raise $500,000 at a $5,000,000 Cap.
1. Post-Money Math (The Trap)
- The math assumes the company is worth $5M after the cash hits the bank.
- Calculation: $500,000 / $5,000,000 = 10% Ownership.
- Result: The investor gets exactly 10%. You own the remaining 90% (assuming no option pool shuffle).
- The math assumes the company is worth $5M before the cash hits.
- Post-Round Value = $5M (Cap) + $500k (Cash) = $5.5M.
- Calculation: $500,000 / $5,500,000 = ~9.09% Ownership.
- Result: The investor gets less equity for the same check. You retain ~90.9%.
Why this matters: At small amounts, 1% seems negligible. But if you raise $2M on a $10M post-money cap, you sell 20%. If that was pre-money, you would only sell ~16.6%. That 3.4% difference is worth millions at exit. Use a seed cap table builder to visualize this before signing.
The Asset
Below is a scenario table comparing a $500,000 investment raised at a $5,000,000 Valuation Cap. This reveals the hidden cost of modern SAFE agreements. If you need the legal text, refer to our Post-money SAFE template guide.
Always verify current standard terms with reputable sources like YCombinator's documents.
Post-Money SAFE vs Pre-Money SAFE
At small amounts, 1% seems negligible. But if you raise $2M on a $10M post-money cap, you sell 20%. If that was pre-money, you would only sell ~16.6%. That 3.4% difference is worth millions at exit.
The standard YCombinator Post-Money SAFE was designed for simplicity, but that simplicity often favors the investor. The most critical nuance is the treatment of the Option Pool. In a post-money SAFE, the option pool is typically calculated before the investor converts, meaning the founders pay for the entire pool out of their stake. Legal experts call this the Option Pool Shuffle.
Always verify which version you are signing. If you need the actual document, you can download a Post-money SAFE template to review the clauses.
The standard YCombinator Post-Money SAFE was designed for simplicity, but that simplicity often favors the investor. The most critical nuance is the treatment of the Option Pool. In a post-money SAFE, the option pool is typically calculated before the investor converts, meaning the founders pay for the entire pool out of their stake. Legal experts call this the Option Pool Shuffle.
Always verify which version you are signing. If you need the actual document, you can download a Post-money SAFE template to review the clauses.
Risks
1. The Option Pool Shuffle
In a Post-Money SAFE, investors often require an option pool (e.g., 10%) to be created within the pre-money valuation. This means the 10% pool comes 100% out of your pocket, not the investors. You dilute twice: once for the cash, and once for the hires.
2. Shadow Series Complexity
When SAFEs convert, they often convert into "Shadow Series" preferred stock (e.g., Series A-1) rather than standard Series A. This ensures the SAFE holders get a liquidation preference equal to their original investment, not the new (higher) Series A price. While fair, it complicates the cap table. Read more on Shadow Preferred Stock mechanics here.
In a Post-Money SAFE, investors often require an option pool (e.g., 10%) to be created within the pre-money valuation. This means the 10% pool comes 100% out of your pocket, not the investors. You dilute twice: once for the cash, and once for the hires.
2. Shadow Series Complexity
When SAFEs convert, they often convert into "Shadow Series" preferred stock (e.g., Series A-1) rather than standard Series A. This ensures the SAFE holders get a liquidation preference equal to their original investment, not the new (higher) Series A price. While fair, it complicates the cap table. Read more on Shadow Preferred Stock mechanics here.
Conclusion
Will a perfect cap table get you to $10k MRR?
Mastering the SAFE pre-seed calculator is a necessary step, but it is not the whole picture. You can have the cleanest legal structure and perfect math, but if your other variables—specifically offer strength and market timing—are weak, your probability of hitting $10k MRR remains near 0%.
The "bridge logic" here is harsh but simple: Investors tolerate high caps and founder-friendly terms only when revenue gives you leverage. Without that traction, you are begging, not negotiating. Focus on sales first; the dilution math only matters if the equity is eventually worth something.
Mastering the SAFE pre-seed calculator is a necessary step, but it is not the whole picture. You can have the cleanest legal structure and perfect math, but if your other variables—specifically offer strength and market timing—are weak, your probability of hitting $10k MRR remains near 0%.
The "bridge logic" here is harsh but simple: Investors tolerate high caps and founder-friendly terms only when revenue gives you leverage. Without that traction, you are begging, not negotiating. Focus on sales first; the dilution math only matters if the equity is eventually worth something.
FAQ
- You:Does the option pool come out of the pre-money or post-money valuation?Guide:In a standard Post-Money SAFE, the option pool increase usually comes out of the founder's equity before the investor calculates their ownership. This means you dilute yourself twice—once for the pool, once for the cash.
- You:Why do investors prefer Post-Money SAFEs?Guide:Certainty. They know exactly how much of the company they own (e.g., $1M on $10M cap is exactly 10%) without needing to know how many other notes or shares are outstanding.
- You:Can I change a Post-Money SAFE back to Pre-Money?Guide:Technically yes, but it requires negotiation. You need to edit the document (specifically the definition of "Company Capitalization") to exclude the SAFE amount itself. Most investors will push back unless your deal is hot.
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