Pre-seed founders sign documents they do not fully read. These are the terms that move the most cap-table math — SAFEs, caps, discounts, dilution, side letters — defined the way a founder would explain them to another founder, with the numbers worked out.
Valuation cap, explained. The single number in your SAFE that decides how much of the company you keep when it converts. Most founders sign one without doing the math; this is the math.
Post-money vs pre-money SAFE. YC's 2018 switch changed who absorbs dilution when you stack multiple SAFEs — and most founders do not know which variant they signed.
SAFE discount rate. The other lever besides the cap. At conversion the investor takes whichever price is lower — and in a strong up-round the cap usually wins.
How a SAFE converts. The exact mechanics that turn your SAFE into shares at the next priced round — plus what happens if you sell or shut down before that.
SAFE vs convertible note. Two ways to take money without setting a valuation. Different mechanics, different defaults, different consequences at conversion. Four questions decide which to sign.
Priced round vs SAFE. When the check sizes and investor sophistication justify pricing the round today — and when deferring valuation is still the right call.
Startup dilution: how much you keep. Every SAFE, pool top-up, and priced round shrinks your %. Model fully diluted, not the headline number on your cap table export.
Option pool and the option pool shuffle. The 10–15% pool investors want pre-money is one of the most common Series A costs — and one of the most negotiable if you know what to push on.
MFN clause. Lets an early investor automatically upgrade to any better terms you give a later one — which can reprice old money without new cash.
Pro rata rights. Not in the YC post-money SAFE by default. When granted via side letter, stacked pro rata can crowd out your Series A lead.
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