What Is Market for Pre-Seed SAFEs Right Now

Pre-seed founders - dig into what "market" is for SAFEs right now

𝗣𝗼𝘀𝘁 𝗼𝗿 𝗣𝗿𝗲 𝗠𝗼𝗻𝗲𝘆 𝗦𝗔𝗙𝗘? 77% of SAFEs in Q1 were post-money. That's the default

𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗖𝗮𝗽 𝗼𝗿 𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁? Essentially 9 of 10 SAFEs have a valuation cap, so that's the expectation.

• 40% of post-money SAFEs have a val cap AND a discount

• 65% of pre-money SAFEs have both terms (interesting! Not sure why...)

𝗢𝗸𝗮𝘆, 𝗯𝘂𝘁 𝙬𝙝𝙖𝙩 𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗰𝗮𝗽? The median valuation cap last quarter was $9.5 million.

This has been holding between $9M and $11M for quite some time. Reminder that the valuation cap does tend to grow with the size of the raise - so if you're raising $250K, a $7M cap might be more appropriate.

At the moment, the median total capital raised on SAFEs per company is $660K.

𝗪𝗵𝗮𝘁 𝗮𝗯𝗼𝘂𝘁 𝗱𝗶𝘀𝗰𝗼𝘂𝗻𝘁𝘀? The median here is a 20% discount - and that holds true whether or not a valuation cap is present.

You can tell from the above numbers that sometimes these figures are arrived at through consensus or appeal to priors rather than a deep analysis of company financials. Which makes sense! The whole reason to use SAFEs is to avoid assigning a specific valuation to what is often just a great team / idea at this stage.

Have a SAFE and fruitful fundraise 😁 and sign up for our data newsletter for more great startup data (link in comments below)

#SAFEs #startups #preseed #fundraising #cartadata

TY Erich Anderson for the starter question this morning