Post-money SAFE is a Simple Agreement for Future Equity that sets conversion economics using a post-money valuation cap, so each SAFE holder’s ownership is determined as a fraction of the post-money company at priced round conversion.

How it works

Under the post-money framework popularized by Y Combinator, a $500K SAFE on a $10M post-money cap targets roughly 5% ownership at conversion (before option pool adjustments in the priced round). Multiple post-money SAFEs sum more predictably than stacked pre-money SAFEs, which historically obscured total dilution until a term sheet arrived.

The priced round still adjusts final numbers—option pool refresh, new investors, and discounts affect outcomes—but founders can spreadsheet seed dilution earlier. Investors accept post-money SAFEs for transparency and faster closes without negotiating full preferred terms upfront.

Why it matters

• Founders: Model total SAFE dilution before signing the fifth seed check; post-money caps aggregate more cleanly than opaque pre-money stacks.
• Investors: Post-money clarity reduces renegotiation fights at Series A when everyone thought they owned different percentages.

Common mistake

Ignoring that the priced round’s option pool increase still dilutes founders on top of SAFE conversion—post-money SAFEs clarify investor stake, not eliminate pool economics.

Related ideas

See pre-money SAFE, priced round, and cap table scenario.