What Should My SAFE Valuation Cap Be Real Benchmarks

Founders: here's a deep dive into what your peers are choosing as their SAFE valuation caps so far this year.

It’s the number one question I get whenever speaking with a group of early founders: what should the valuation cap be on my upcoming SAFE fundraise?

And I can see why it’s hard to figure out! You’ve got angels in smaller markets insisting that anything above a $3M valuation cap is silly in today’s market. You’ve got YC founders raising on $20M valuation caps as a matter of course.

Confusing.

So I broke out the distribution of SAFEs by both the total size of the SAFE round and the valuation cap tier. The chart starts at light blue (under a $2.5M cap) and ends at the deep navy (val cap of $20M+).

So here’s what the data tells us:

𝗦𝗔𝗙𝗘 𝗿𝗼𝘂𝗻𝗱𝘀 𝘁𝗵𝗮𝘁 𝗿𝗮𝗶𝘀𝗲 𝘂𝗻𝗱𝗲𝗿 $𝟮𝟱𝟬𝗞 have a median valuation cap of $5M, with a healthy amount both above and below that figure.

I'm personally a little apprehensive about really large val caps with a small cash raise. Who is out there raising less than $250K on a $20M cap? Wild.

$𝟮𝟱𝟬𝗞-$𝟱𝟬𝟬𝗞? Median is $6M valuation cap.

$𝟱𝟬𝟬𝗞-$𝟭𝗠? Big bump up to a $10M median cap.

Beyond $1M, I’d say you’re getting into “seed on SAFEs” territory (although I’ve heard that pre-seed may now extend up to $2M raised).

$𝟭𝗠-$𝟮.𝟰𝗠 𝗿𝗮𝗶𝘀𝗲𝗱: median val cap of $12M

$𝟮.𝟱𝗠-$𝟰.𝟵𝗠 𝗿𝗮𝗶𝘀𝗲𝗱: median val cap of $20M

𝗢𝘃𝗲𝗿 $𝟱𝗠 𝗿𝗮𝗶𝘀𝗲𝗱: median val cap of $30M

In any case - clear takeaway here is that there is no “right” answer.

People tend to default to round numbers at this stage. I will caution founders that the trend of raising 3 or 4 or even 5 separate SAFE rounds (defined by SAFEs with different valuation caps) may seem like a great way to bring in bits of cash along the way—but watch out for dilution!

You can always see exactly how your SAFEs stack up to market on our website at Carta dot com / safes. Bonus points for using our workflow to create, issue, sign, and wire a SAFE round, all in a few clicks.

SAFEty first! Then teamwork.

#cartadata #SAFEs #valuationcap #pre-seed #fundraising #startups #founders