The post-money SAFE has eaten the world of pre-seed fundraising—so how should founders think about using this tool?
Most founders spend a sizable chunk of time considering the valuation cap at which they will raise using a post-money SAFE.
But perhaps the better mental model would start by discussing the acceptable level of dilution the founder is willing to take on for a given amount of cash.
To take the famous Y Combinator example: when startups join YC, they receive $125,000 in exchange for 7% of the company.
(Yes, there is a second SAFE that gives them another $375,000 uncapped, but leave that aside for now).
So the implied valuation cap for a YC investment is about $1.78M - but that's not the focus.
I think founders, especially those who are raising multiple rounds of SAFEs, would be better served by focusing on the dilution implications for the money as opposed to the valuation caps. It's the same math, but the emphasis on dilution may help clarify the value of these early funds to the business.
Remember, those post-money SAFEs come with anti-dilution built into the process. Each slice of equity pie is set in stone until after the first priced fundraise is completed.
Just an idea!
Subscribe here if you're new to the Data Minute. Forwarding encouraged!
Peter Walker
DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. ("Carta"). This communication is for informational purposes only, and contains general information only. Carta is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein. © 2026 Carta. All rights reserved. Reproduction prohibited.
