Which SAFE Types Are Most Popular in Pre-Seed Fundraising

You're a founder fundraising using SAFEs. Which SAFE are your peers using?

First: they're using the post-money SAFEs, by and large. About 86% of all capital invested into pre-seed companies in the US is flowing through the post-money SAFE.

Second: Those post-money SAFEs usually just have a valuation cap...and that's it.

I should note, all this data applies to SAFEs that were signed before any priced rounds. So we're talking about pre-seed and seed here (as well as angel rounds).

So - why just a valuation cap?

Wouldn't investors want the cap and the discount, to protect against the potential of the company raising their priced round below the cap?

Eh, I guess not.

Interesting to watch the Discount Only SAFE type growing in popularity. Also not exactly sure what the thesis is for discount only (especially since the discount is almost always 20%, which doesn't feel like a very big discount...maybe those are SAFEs that expect to be converted quickly?)

And uncapped, no discount SAFEs remain the exclusive playground of best friends or parents - founders shouldn't expect those 😁

Founders can create, send, and sign SAFEs through Carta for free at: carta dot com / safes

Data to the founder!

#startups #SAFEs #valuationcap #founders