Category: Convertible Notes and SAFEs
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07 Resisting the ‘SAFE stack’: when to switch to a priced round
TL;DR: Before agreeing to multiple post-money SAFE rounds to save time and money in the short run, founders should think through how much money they could save in dilution in the long run by switching to a simple equity financing. Download the example spreadsheet for this post. *** Resistance is futile. Although Y Combinator has…
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03 First preferred equity financing and pool expansion
TL;DR: Once you’re ready to raise a “real” equity round, such as Series Seed or Series A, use Excel to consider the effects of an option pool increase and the conversion of your SAFEs and convertible notes. Download the open-source cap table and the example spreadsheet. * * * As I discussed in the previous…
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02 SAFEs and convertible notes
TL;DR: If you’re thinking about a seed round involving SAFEs or convertible notes, you can use Excel to model their effect on your common stock. No matter how simple the documents may seem, never just “sign and close” without thinking through the effects of dilution. Download the open-source cap table and the example spreadsheet. *…