Document: Y Combinator
Your SAFE cap is not your next-round ownership.
Separate the ownership sold today from the dilution that arrives at conversion.
Terms & ownership
The fine print.
In plain sight.
Understand what changes your ownership, control and proceeds. Start with a transparent example, then follow the source.
Interactive illustration / one priced round
A round changes
the whole cap table.
Adjust the investment and pre-money valuation to see the simplest version of dilution.
Existing holders80%after this round
Existing holders 80% New investor 20%
$4M ÷ $20M post-money = 20% to the new investor.
Illustrative arithmetic only. New-investor share = investment ÷ (pre-money + investment). No SAFEs, debt, fees or option-pool increase. Existing holders collectively own 100% before the round. What a real pro forma adds →
The reference shelf
Know the mechanics.
Artwork: Carta
The option pool belongs in the price conversation.
A hiring reserve can change who bears dilution, even when the headline valuation stays put.
Artwork: Carta
Same exit. Different money in your pocket.
A worked example of how participation changes the split between preferred and common.
Artwork: Carta
A fund multiple has two very different ingredients.
Read distributed value and remaining portfolio value separately.