Raising money · A term for founders abroad
What is a post-money valuation?
A company's value including the new money just invested; on a post-money SAFE, the cap is a post-money figure, so ownership is fixed at signing.
Checked against the IRS's instructions and the states' own rules. Reviewed by Saais Patel, compliance reviewer.
Term 78 of 105 in the glossary, filed under P.Y Combinator: the post-money SAFE
Post-money valuation, for a founder abroad.
Pre-money is what the company is worth before an investment; post-money adds the investment. A company valued at $10 million pre-money that raises $2.5 million is worth $12.5 million post-money, and the new investors own 20%.
Since 2018 Y Combinator's standard SAFE uses a post-money cap, so each SAFE's share can be worked out when it's signed: the investment divided by the cap. That made dilution visible SAFE by SAFE, which was the point.
Sources: Y Combinator: the post-money SAFE.
Read next · guide · 3 minSAFEs explained: how startups raise before a priced round, and why they need a corporationWhat founders ask next.
- How do I work out what an investor owns?
- The investment divided by the post-money valuation: $2.5 million into $12.5 million is 20%.
03 · See also
- Raising moneyValuation capThe highest company valuation at which a SAFE converts, so an early investor's shares are priced at no more than the cap.Read the term
- Raising moneySAFEAn investment contract, published by Y Combinator, where an investor pays now for shares issued at a later priced round; used by US corporations.Read the term
- Raising moneyCap tableThe record of who owns what share of a company, including options, SAFEs and other convertible instruments; investors read it first.Read the term
- Raising money83(b) electionA founder's choice to be taxed on restricted stock when it's granted rather than as it vests, filed with the IRS within 30 days, with no extension.Read the term
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