The founder remembers raising half a million dollars. Then another half million. Then a helpful angel joined before the round closed. In the bank account, this is one million dollars plus helpfulness. In the capitalization model, helpfulness has a denominator.
A rolling SAFE raise lets you close checks without assembling everyone for a single elaborate transaction. That flexibility is real. It can also produce a curious kind of amnesia: each check feels like a separate win, while the ownership obligations wait together for the same financing.
The provision on the table
Fictional stack: Investor A contributes $500,000 at a $5 million post-money cap. Investor B contributes $500,000 at a $10 million post-money cap. Both instruments are outstanding when the priced round closes.
Our explanatory wording, not a quotation or modification of a YC form. Open a margin note:
What this means
When both caps determine conversion, the ownership estimates add: 10% plus 5%, before new round cash.
What works for you
Post-money math can make each promise legible. Separate closing dates do not require pretending the obligations are unrelated.
Where it can bite
A lower round price, an MFN election or an option-pool change can move the outcome beyond the tidy initial estimate.
If you do not ask
A single reconciled ledger, with principal, form, cap, discount, MFN, side letters and conversion assumptions for every holder.
Inside the investor’s head
The investor wants a predictable entry stake. The founder bears the aggregate effect of making several individually attractive promises.
Start with our deliberately simple fictional stack: $500,000 at a $5 million post-money cap and $500,000 at a $10 million post-money cap. If the caps govern conversion, the estimated pre-new-money ownership is 10% and 5%. The founder’s starting common stake is therefore 85% in a company with no other holders, options or instruments. 1
Raise $2 million in a priced round whose $10 million pre-money includes the converting SAFEs, with no pool increase. New cash buys one-sixth of the post-round company. The founder’s 85% becomes about 70.83%; the two SAFE stakes become about 8.33% and 4.17%. This is the explicit simplified convention used in the SAFE Stack, not a plug-in answer for a term sheet whose pre-money excludes convertibles.
The $1 million did not buy a permanent 15% unaffected by future fundraising. “Post-money” in this context accounts for the SAFE money, not every dollar that will ever arrive.
Now lower the round price
Set that modeled round pre-money to $4 million. Both investors can obtain the round price rather than their cap prices. In this no-options model each $500,000 investment represents 12.5% of the pre-new-money capitalization. Together they take 25%, not the earlier 15% estimate. 12
That is a worse outcome for founder ownership. It is not evidence that someone secretly changed the caps. The instrument already contains a conversion rule that can favor the lower round price.
If the aggregate promises exhaust the modeled capitalization, a respectable calculator should stop. A negative founder stake is not an edgy visualization. It is a sign that the assumptions no longer describe a workable closing and that counsel needs to model the real transaction.
The spreadsheet should include the attachment
An uncapped MFN cannot always be assigned a fixed percentage on signing. Its conversion may depend on the future round or an election into a later instrument. An existing option pool, promised options and a negotiated increase also require the relevant definitions, not an arbitrary haircut at the bottom of the spreadsheet.
The practical problem is version control. Someone tracks the bank wires. Someone else tracks the signed documents. A side letter stays in an inbox because it did not change the wire. At the priced round, the lead investor learns that the apparently available allocation has several prior claimants.
The founder should maintain a ledger that reconciles those three places. A cap-table service can help; it cannot enter a letter nobody gave it. Every new close should prompt a fresh fully diluted model and a check for notice obligations.
The investor’s helpful suggestion
Our imaginary Post Money Capital partner would be delighted to discuss the size of your next round. A larger round solves many inconveniences, including the inconvenience of our follow-on allocation. It may also dilute you further.
An investor can legitimately want a clearer ownership target. A founder can legitimately want enough capital to reach the next milestone. They should put both wants into the same model before discussing whose percentage is “standard.”
Keep the rolling close. Lose the separate mental accounts. The company only has one capitalization table, however many congratulatory emails you received.