Pre-Money vs Post-Money SAFE: What to Negotiate and Why It Matters

The Core Difference

• Pre-money SAFE (YC's 2013 form): valuation cap applies to the company's pre-money valuation at the priced round. Multiple SAFEs share dilution; the percentage each gets depends on what comes after.
• Post-money SAFE (YC's 2018 form): valuation cap applies to the post-money valuation, locking in the investor's ownership percentage at conversion. Stacking more SAFEs dilutes founders, not other SAFE holders.
• Post-money SAFEs are now standard. They make investor math cleaner, but founders pay for that cleanliness in additional dilution as SAFEs stack.
• Both convert to preferred stock at the next priced round, using either the cap price or the discount, whichever is better for the investor.