Y Combinator’s post-money Simple Agreement for Future Equity (Safe) is essentially a series of mathematical equations in the form of a legal document.
My spreadsheet for Post-Money Safe with Valuation Cap (and Optional Pro Rata Rights) allows companies to test hypothetical future dilution scenarios (i.e., Series A financing and liquidity event) to measure projected Safe-caused dilution to founders and others. This spreadsheet is available for purchase in downloadable Excel format here.
This spreadsheet allows testing of potential dilution as specifically applicable to your company by creating inputs for:
- pre-Safe pre-Series A company capitalization, including common stock, options, promised options, and unissued option pool;
- up to two different Safes with different purchase amounts, valuation caps, and optional pro rata rights;
- a Series A round with variable new raise, pre-money valuation, target post-money pool, and lead investor purchase amounts; and
- liquidity event proceeds;
The inputs build separate cap tables for post-Safe conversion, post-Safe conversion and post-equity financing, and post-liquidity event.
This spreadsheet is for use only with Y Combinator’s post-money Safe with valuation cap (and optional pro rata rights), and not for use with any other Y Combinator Safes.
As suggested on page 13 of the quick start guide, the post-money Safe can be highly dilutive to founders, including diluting up to 100% of founder equity (e.g., a $5 million raise at a $5 million post-money valuation cap). To prevent unwelcome surprises, please determine dilution resulting from your planned Safe financing before raising that first penny of capital.