Post-money SAFE: how much stays fixed until the Series A?

You signed a $500,000 SAFE under a $5 million post-money valuation cap. Your investor says, "I will own 10% of the company." They are right, but at what moment? The day the SAFE converts, or after the Series A that triggers it? The answer changes what you show your future investors and what you keep yourself.

This article relies on a single source, the post-money SAFE user guide published by Y Combinator, because it is the text that defines the mechanics. It does not replace a lawyer: a SAFE is a contract, and its exact version matters.

What post-money fixes: the share against other SAFEs

Y Combinator summarizes the principle on its SAFE page: the ownership sold equals the investment amount divided by the valuation cap. The cap is "post-money" because it includes the money from all the SAFEs signed.

The guide gives the basic calculations. To target $1 million and 15% sold, the cap is about $6.7 million (1 / 0.15). If you only raise $500,000, you sell 0.5 / 6.7, about 7.5%. With two different caps, $500,000 at $5.5 million and $500,000 at $8.3 million, you sell about 9% and about 6%, so 15% in total.

The consequence is valuable: each new SAFE you sign takes its share from the founders, not from earlier SAFE holders. The guide puts it this way: SAFEs are not diluted by each other. That is the post-money promise of transparency, and the reason a founder knows at signing how much they are selling.

What it does not fix: the Series A

What the promise does not cover is written plainly in the guide. The cap is "post" all the SAFE money, but it is not "post" the money raised in the Series A. In other words, a SAFE holder is diluted by the new investors, like any existing shareholder.

A simple example, with numbers from this page. Your $500,000 SAFE at $5 million represents 10% before the Series A. If the Series A new investors take 20% of the company after the round, your investor’s share becomes 10% x (1 - 20%), so 8%. The option pool is not yet part of this calculation.

The option pool deserves its own paragraph. The post-money cap accounts for the options and pool that exist before the Series A. It does not account for the pool created or increased as part of the Series A. Y Combinator explains this choice: that pool is for hiring with the Series A money, so the SAFEs bear their share, otherwise founders would pay for two rounds of hiring having received capital for only one. Conversely, options granted between the SAFE signing and the Series A do not dilute the SAFEs.

The guide’s worked example, line by line

The guide offers a complete case, to be read with its assumptions. The company sold 15% of its capital in SAFEs ($750,000 at a $5 million post-money cap) and gave each investor a pro rata side letter. It granted 8% in options to people hired between the SAFEs and the Series A. In the Series A, new investors will own 25% after the round, excluding the SAFE pro rata, and an option pool increase creates a 10% available pool after the round.

The guide draws these results:

1. The SAFE pro rata adds 4.41% of subscription (25% / (100% - 15%) - 25%), so round investors and SAFE holders using pro rata represent 29.41%.
2. The round’s dilution reaches 39.41% (29.41% of investments and 10% of pool).
3. The 15% of SAFEs becomes 9.09% (15% x (100% - 39.41%)).
4. The 8% of options granted before the Series A becomes 4.12%.
5. The guide’s total is 52.62% for the three groups other than founders: 9.09% + 4.12% + 39.41%. By difference from 100%, and if there is no other holder of capital, founders keep 47.38%: that last figure is this article’s own calculation, not the guide’s.

The guide specifies that the SAFE share is "post-safes" and not "post-Series A": SAFEs form their own round, and the Series A dilutes them like everyone else. These are demonstration figures, with the assumptions above, not a forecast for your company.

Two situations where conversion is less simple

The guide warns that if the valuation of the conversion round is below the cap, or too close to it, SAFEs may convert into more than the estimated ownership. The cap then matters less than the round price: the holder receives shares at the price paid by new investors, if that is better. Modeling a single valuation scenario is therefore not enough.

The second case is pro rata. It is not automatic in the post-money SAFE: it sits in an optional side letter. If you sign it, include in your calculations the share holders will come to subscribe, using the guide’s formula above.

What to model before signing the next SAFE

Five lines are enough for a first calculation, and they reuse the guide’s variables:

• The share sold by each SAFE: amount divided by cap.
• The share you expect for the Series A new investors, trying several values.
• The option reserve you want after the Series A.
• The options already granted or promised before the Series A.
• Pro rata: yes or no, and for which investors.

For neighboring instruments, two Ember articles complement this one: how to manage post-money SAFE stacking, and choosing between a SAFE and a convertible note. The pre-money pool mechanism is explained in How the option pool shuffle lowers effective valuation.

Where Ember can help, and its limits

In the Second Brain, the "Cap table & dilution" Excel template lists your shareholders, including the option reserve, and simulates a priced round with the before and after split for each. It does not convert post-money SAFEs according to the rules described above: for that case, redo the guide’s calculation in a spreadsheet and have the result checked by a lawyer or your usual adviser.

Fund Your Growth keeps a project’s assumptions visible and editable, with their caveats. It is meant to link a funding need to an action plan, not to establish your legal cap table.