SAFE Fundraising Benchmarks Inside and Outside Silicon Valley

SAFE fundraising inside and outside Silicon Valley - cheatsheet below.

Taken together, two factors (location + amount needed) can help you decide on the right valuation cap for your SAFEs.

Over 15,000 post-money SAFEs were issued on Carta last year (you love to see it). That's not even counting the ones issued for companies between priced rounds or the international SAFE flavors.

The two questions I get from early-stage founders raising on SAFEs are:

1. "What should my valuation cap be?" 2. "Okay, ya, but what should it be for companies not in Silicon Valley?"

Let's answer both 😁

SAFE valuation caps set the maximum point at which the SAFE investors will convert into equity whenever you end up raising a priced round. These valuation caps are HIGHLY sensitive to the total amount you end up raising in a given SAFE round.

In the chart below, the circles are medians and the ends of each line are 25th / 75th percentiles.

𝗦𝗔𝗙𝗘 𝗿𝗼𝘂𝗻𝗱 𝘂𝗻𝗱𝗲𝗿 $𝟮𝟱𝟬𝗞

• Median val cap of $6M in CA & NY

• Median val cap of $5M in the US outside those two states

𝗦𝗔𝗙𝗘 𝗿𝗼𝘂𝗻𝗱: $𝟮𝟱𝟬𝗞-$𝟰𝟵𝟵𝗞

• Val cap: $8M CA & NY

• Val cap: $6M outside

$𝟱𝟬𝟬𝗞-$𝟵𝟵𝟵𝗞

• $10M val cap in CA & NY

• $8M outside

The above covers what we usually think of as "pre-seed" raises. Now on to the "seed on SAFEs" category (which is blowing up, btw)

𝗦𝗔𝗙𝗘 𝗿𝗼𝘂𝗻𝗱: $𝟭𝗠-$𝟮.𝟰𝗠

• $12M cap for CA/NY

• $12M outside (slightly lower full range however)

$𝟮.𝟱𝗠-$𝟰.𝟵𝗠 (𝗵𝗲𝗳𝘁𝘆 𝗦𝗔𝗙𝗘 𝗿𝗼𝘂𝗻𝗱)

• $18M CA/NY

• $20M outside

$𝟱𝗠+ (𝗷𝘂𝗺𝗯𝗼 𝗦𝗔𝗙𝗘 𝗿𝗼𝘂𝗻𝗱)

• $30M cap in CA & NY

• $28M elsewhere

So what should we learn from this?

1. Your valuation cap should, in many cases, be an output from the inputs of total dollars needed + tolerance for dilution. Don't just set it at $10M because it seems simple.

2. Companies outside CA and NY do end up raising at slightly lower valuation caps, especially in the pre-seed stage. Expect pushback from investors in non-mature markets (not saying they're right, just heads up).

3. You can create, issue, wire, and fund SAFEs through Carta in like 5 clicks (carta dot com / safes).

Fundraise SAFE-ly this weekend.

Get more data like this in your email inbox by subscribing to our Data Minute newsletter! Link in graphic, share with your friends, all that good stuff.

#cartadata #SAFEs #preseed #startups #founders