Investors almost exclusively push for the Post-Money SAFE because it locks in their ownership percentage and forces you to eat all the dilution from the option pool. If you want to retain 1-3% more equity at conversion, you need to use the older, pre-money logic and understand exactly how to argue for it.

The pre-money SAFE is a convertible equity instrument where the "Company Capitalization" creates a price per share based on the valuation before the new money enters. This structure often forces investors to share the dilution of the option pool, rather than pushing it entirely onto the founders.

• Benchmark: Using a pre-money structure can save founders 2-5% ownership compared to post-money, depending on the option pool size.
• Rule: Never agree to a "Post-Money" valuation cap without running the math on how the option pool size impacts your personal stake.
• Warning: Most VCs will claim the pre-money SAFE is "obsolete" or "non-standard" because Y Combinator retired it in 2018; this is a negotiation tactic, not a legal fact.

How to read this: Use this as a counter-proposal when an investor insists on a Post-Money SAFE without offering a higher valuation to offset the dilution.

Below is the critical comparison of the "Company Capitalization" definition. The Post-Money version (standard today) includes the "Unissued Option Pool," effectively forcing you to pay for future employees out of your pocket. The Pre-Money version (founder friendly) shares that pain.

*** PRE-MONEY SAFE DEFINITION (FOUNDER FRIENDLY) ***
"Company Capitalization" means the sum, as of immediately prior to the Equity Financing, of:
(1) all shares of Capital Stock (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all outstanding vested and unvested options, warrants and other convertible securities, but excluding:
(A) this Instrument,
(B) all other Safes, and
(C) convertible promissory notes; and
(2) all shares of Common Stock reserved and available for future grant under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection with the Equity Financing.

*** POST-MONEY SAFE DEFINITION (INVESTOR FRIENDLY) ***
"Company Capitalization" means the sum, as of immediately prior to the Equity Financing, of:
(1) all shares of Capital Stock (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all outstanding vested and unvested options, warrants and other convertible securities; and
(2) all shares of Common Stock reserved and available for future grant under any equity incentive or similar plan of the Company, and/or any equity incentive or similar plan to be created or increased in connection with the Equity Financing.

The definitions above look similar, but the mathematical impact is significant. Experts like Alejandro Cremades warn that founders often underestimate dilution by failing to model these scenarios.

Sample Math:
Assume you raise $1,000,000 at a $10,000,000 Cap with a 10% Option Pool.

• Post-Money Scenario: The investor owns exactly 10%. You (Founder) own 80%. The Pool is 10%. The investor's stake is fixed, so you absorb all dilution from the pool creation.
• Pre-Money Scenario: The investor's ownership depends on the exact price per share calculation. Because the "Company Capitalization" excludes the converting notes, the investor shares the dilution of the pool. The investor typically ends up with 9.0-9.2% and you retain 81.0-82.0%.

That 1.5-2.0% difference is "free" equity you keep simply by changing the definition text. At a $100M exit, that is $1.5M-$2M in your pocket.