Share Dilution Spreadsheet: Y Combinator Post Money SAFE

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How much startup share dilution will your Y Combinator SAFE result in when you do a priced round that converts the SAFEs to stock? This video walks through a share dilution spreadsheet that allows you to analyze the dilution of the post-money SAFE.
The SAFE (Simple Agreement for Future Equity) is a popular startup funding mechanism that entrepreneurs use particularly for angel funding, but they do result in equity dilution that is important for startup founders to understand.
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All types of convertible securities such as convertible notes and the Y Combinator SAFE can significantly add to your dilution when you do a priced round. So it's a good idea to use a share dilution spreadsheet to keep track of that dilution. The spreadsheet analyzes up to 5 post-money SAFEs, each with a different investment amount and a different valuation cap (post-money valuation cap). And each SAFE can have a pro rata right that's included in the dilution calculation..
Download the Post Money SAFE spreadsheet at www.startupsos.com/post-money-...
Download the Y Combinator Quick Start Guide at
startupsos.com/docs/post-money...

Пікірлер: 14

@whalelifeproductions8295 4 жыл бұрын

The value you are providing with your videos are incredible. Wow

@Startupsos 4 жыл бұрын

Thanks!

@joaq9790 2 жыл бұрын

Thank you Steve, very easy to understand!

@Startupsos 2 жыл бұрын

You are welcome!

@tju2009 3 жыл бұрын

very helpful! thanks

@TINTUHD 3 жыл бұрын

You're the best!

@Startupsos 3 жыл бұрын

Thanks!

@alitaghavi4430 2 жыл бұрын

Thank you for this great video. If I may ask: I did not understand why the other investors in the Series A round got diluted when the Pro Rata kicked in but not the shares of the lead investor? Was this defined somewhere?

@TINTUHD 3 жыл бұрын

Also just a heads up, when I got the email with the spredsheet google was marking it as spam because you are using a gmail account. If you use a domain email, it'd probably reduce spam

@Startupsos 3 жыл бұрын

Thanks for the heads-up. I'll switch that to a StartupSOS email.

@localism479 3 жыл бұрын

After working with the spreadsheet (thanks) I have an observation. With the post-money SAFE there is an option to offer a conversion discount, which basically means a 10% discount would convert for about 10% more shares when the priced round closes. But this spreadsheet has a "percent" field which I assumed was the percent of the conversion discount. It is not! When you put 10% in there the final calculation makes that SAFE investor's money worth 10% of the company. So there is no way with this spreadsheet as it is to factor in a conversion discount for a SAFE.

@Startupsos 3 жыл бұрын

That is correct - the purpose of this spreadsheet to help understand how the post-money value affects the final stock price (and the dilution). As pointed out in the Video "How Discounts and Valuation Caps Work" (kzfaq.info/get/bejne/orqGktGWsryVe6s.html) to analyze a SAFE that has both a discount and a cap, you need to calculate the stock price implied by the discount and the price implied by the cap to determine which term gives the better price. Once you have the Series A price, the discount price is easy to calculate - just apply the discount to the Series A price.

@localism479 3 жыл бұрын

@@Startupsos Thank you!

@Startupsos 3 жыл бұрын

You are most welcome!