The same €500k check can cost you 3–5% more of the company depending on which variant you sign — and most founders do not know which one is on the document until someone models the cap table. This is that model, in plain English.
Reading time: 8 minutes. Worked stacking example with €/$ math. No jargon without a number attached.
A SAFE's valuation cap sets the ceiling price for conversion. Pre-money caps that ceiling on the company value before the new SAFE money is counted. Post-money caps it including all SAFE money — so the investor's ownership is fixed the day they wire.
Y Combinator introduced the pre-money SAFE in 2013 and replaced it with the post-money SAFE in October 2018. The post-money version is now the YC default and what most US seed investors expect. European angels are catching up, but you still see pre-money language in bespoke documents — sometimes by accident, sometimes on purpose.
The practical difference: under post-money, an investor who puts in €200k on a €10M post-money cap owns exactly 2% from day one, regardless of how many other SAFEs you stack afterward. Under pre-money, that same check's eventual % depends on every later SAFE and how the priced round is structured. The founder absorbs the uncertainty either way — post-money just makes it visible earlier.
Post-money formula: ownership % = investment ÷ post-money cap. A €500k check on a €10M post-money cap is 5%. Full stop. Stack four more SAFEs and the collective SAFE slice grows — but each earlier investor keeps their agreed %; you, the founder, give up the extra points.
Pre-money formula: each SAFE's % is calculated at conversion against a cap that excludes (or treats differently) the incoming SAFE pool. Later SAFEs dilute earlier SAFE holders alongside you. That sounds founder-friendly — and it can be, on a single check — but it also makes the cap table harder to model before the priced round, because every new signature changes everyone else's math.
Investors like post-money because the % is locked. Founders often prefer pre-money when raising a party round of many small checks, because dilution is shared across the SAFE pool instead of concentrated on the founder. Neither is "free" — you are always trading certainty for flexibility, or the reverse.
Never mix variants without modelling. A cap table with three post-money SAFEs and one pre-money SAFE is not illegal, but it is a spreadsheet accident waiting to happen. Pick one convention per round and stick to it.
You raise €1,000,000 total across several SAFEs, all at a €10M valuation cap. For simplicity, assume one priced round later and no option pool yet.
Post-money SAFEs: each investor's % = their check ÷ €10M. Collectively the SAFE pool owns €1M ÷ €10M = 10% before the priced round. You own the remaining 90%. If you add another €200k SAFE later on the same €10M post-money cap, total SAFE ownership becomes 12% (€1.2M ÷ €10M). You drop to 88%. The original investors keep their 10%; you absorbed the extra 2%.
Pre-money SAFEs (illustrative): the €1M SAFE pool might convert to roughly 9–9.5% at the priced round depending on how the conversion mechanics treat stacked money — the earlier checks get diluted by later ones. When you add that same €200k follow-on, some of the dilution hits the first SAFE holders, not only you. In a typical model, founders might retain ~91% pre-priced-round vs 88% under post-money — a ~3 percentage-point swing from convention alone, before Series A.
Takeaway: post-money is not "more expensive" on every deal. On a single €500k check, the gap is small. Stack five SAFEs over 18 months and the convention becomes a founder-tax you should negotiate into the cap itself — not discover at Series A.
Read the YC template version and the defined terms. "Post-money valuation cap" and "post-money SAFE" should appear explicitly. If the doc says post-money but the cap math treats money as pre-money, that is a red flag — model it before you countersign.
One or two large checks: post-money clarity is manageable. Six €50k–€150k angels over a year: post-money concentrates dilution on you — negotiate a higher cap or push pre-money for the round. The right answer depends on your raise shape, not the Twitter consensus.
Post-money gives you a false sense of stability if you only look at the first check. Sum every committed SAFE, divide by the cap, and stare at the founder remainder. If that number breaches your internal floor (many founders use 70–75% pre-Series A), fix the cap now.
Prism reads your SAFE, extracts whether the cap is pre-money or post-money (plus the template version when stated), and pulls the cap amount. It models resulting ownership for each check and the stacked SAFE pool against your playbook — your rules for maximum SAFE overhang, minimum founder % pre-priced-round, and which variant you accept at your stage.
Findings are categorised low / medium / high with market context and ready-to-send redlines. If your playbook says "post-money only, max 12% SAFE pool at €10M cap" and the document is pre-money with a stacked €1.2M raise, that is a high finding before the wire transfer clears.
V1 scope: document extraction, playbook comparison, findings, and redlines — not legal advice, not a substitute for a lawyer, but faster than rebuilding the spreadsheet at 11pm before a signing deadline.
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Valuation cap, in plain English — the single number that decides how much of the company you keep when the SAFE converts.
Startup dilution: how much you keep — where post-money vs pre-money shows up in your cap table math over time.
How a SAFE converts to equity — the exact mechanics that turn your SAFE into shares at the next round.
If there's a term you're trying to understand right now and it's not here, tell us — the order we write these in is driven by what founders ask for.
