Y Combinator’s first SAFE was considered a “pre-money” SAFE. In a pre-money SAFE, the investor doesn’t yet know what percentage of the company they actually own, relative to the founders and other SAFE investors. ... In a seed round, an investor gives $1 million to a startup as part of a pre-money SAFE. The startup also raises money ...
Startup accelerator and Cooley client Y Combinator (commonly referred to simply as “YC”) maintains a set of financing documents (referred to as SAFEs, or Simple Agreement for Future Equity). We have created a generator on Cooley GO for preparing your own customized set for free, plus additional generators that produce modified forms of Safe ...
The Y Combinator Standard Deal - $500k. About. What Happens at YC? Apply YC Interview Guide FAQ People YC Blog. ... We invest $125,000 on a post-money safe in return for 7% of your company (the “$125k safe”) ... A stock option pool is created or increased to a pre-agreed percentage of the company.
And so in both a priced round down for SAFEs, the formula stays the same. So, the pre-money valuation plus the amount of money raised equals the post-money valuation of the company. Okay. So, if you have a $5 million pre-money valuation and you raise $1 million, then the post-money valuation of the company is $6 million. Okay?
The pre-money SAFE #1 investor receives = investment / conversion price (inv. 1) = $500 000 / $2.5 = 200 000 shares . SAFE #2: ... Initially, there was only a pre-money SAFE. The people behind Y Combinator, the creators of SAFEs, realized that 2 issues with the agreement needed to be addressed.
The original SAFE was a pre-money SAFE that was developed for the Y-Combinator group in late 2013 as an alternative to convertible notes (if you are looking for more info about SAFEs vs. Convertible Notes, you should check out our article about that here). YC then updated their standard template to be a Post-Money SAFE in 2018.
It was invented in 2013 by Y-Combinator. You can view their template here. A Pre-Money SAFE means that, when a SAFE converts based on the valuation cap, it calculates the conversion price per share based on the Company Capitalization EXCLUDING shares issuable to convertibles (SAFE + convertible notes).
There were several shortfalls to the original pre-money SAFE making it less than ideal for startups trying to raise pre-seed and seed capital. In 2018 Y Combinator created a new, post-money valuation cap version of the SAFE. This version retains the simple nature of the SAFE while addressing the shortfalls but, beware, it does operate quite ...
Quick Recap of Pre-Money SAFE Templates What is a SAFE Agreement? 1. Y Combinator's Official SAFE Templates 2. NVCA Model Documents 3. Kindrik SAFE Templates Key Considerations When Choosing a Template Common Elements in Pre-Money SAFEs Create Your SAFE Agreement Additional Resources About SAFEs (But Not Templates) Share your SAFE documents ...
The “pre-money” SAFE was introduced by Y Combinator(the world’s preeminent startup accelerator) in late 2013 to allow startups to receive their first investment quickly and easily. This worked fine when the size of funding rounds was smaller and when the SAFE immediately preceded a Series A round.
News and discussion around Y Combinator and Y Combinator companies. In 2005, Y Combinator created a new model for funding early stage startups. ... Pre Money is the company’s valuation before Cash is injected ... Investor B converts their 10% Post Money SAFE into equity (10% of $10M = $1M worth of equity, even though they only put in $800K)
Introduced by Y Combinator in 2013, the SAFE is a financial instrument designed to simplify the process of early-stage funding. Functioning as an agreement between an investor and a startup, it grants the investor the right to claim equity in the company at a later event, typically during a future priced funding round, without determining a ...
For example, if an investor made a $250,000 investment using a SAFE with a $5,000,000 post-money valuation cap, the investor would know that they will own at least 5% ($250,000 / $5,000,000) of the startup just before the startup’s priced round of equity financing, regardless of the pre-money valuation of the priced round and regardless of ...
Some changes have happened in the startup world since Y Combinator introduced the Pre-Money SAFE in 2013, however; namely, the increase in the overall size and volume of convertible rounds by ...
These are two official types of Y Combinator SAFEs: Pre-Money and Post-Money. What is a Pre-Money SAFE? The original YC safe from 2013 was a “pre-money” safe because the valuation cap in the ...
The first Y Combinator SAFE agreements were pre-money valuations, but today most investors prefer post-money SAFE agreements. Why Investors Favor Post-Money SAFE Agreements. With the post-money SAFE agreement, the investor and company agree on a post-money valuation cap. Post-money valuation simply means the total of the pre-money valuation ...
Data from Carta on pre-seed financings in Q1 2023 shows that the Post-Money SAFE (Simple Agreement for Future Equity), which was introduced by Y-Combinator in 2018, is now used about three times as often as the Pre-Money SAFE, introduced by YC in 2013, for raising pre-seed financing.*
Y Combinator CEO Garry Tan says for about a quarter of the current YC startups, 95% of the code was written by artificial intelligence models.
