Cap Table Simulator

How to Use the Cap Table Simulator

Cap Tables and SAFEs — The US Startup Operating Reality

10 Facts About Cap Tables + SAFEs

Frequently Asked Questions

• What is a SAFE?+
  Simple Agreement for Future Equity — a contract created by Y Combinator in 2013 where an investor gives money to a company in exchange for equity at the next priced round. Unlike convertible notes, SAFEs have no interest rate, no maturity date, and no debt-related complications. The terms that matter: valuation cap (max valuation at conversion) and discount (price advantage at conversion). The YC post-money SAFE (2018 update) is now the US standard.
• What's the difference between pre-money and post-money SAFE?+
  Post-money SAFEs (YC 2018 standard) explicitly fix the SAFE investor's ownership percentage at the time of signing — clean, predictable. Pre-money SAFEs (old YC standard) shared dilution math with founders in opaque ways. The two produce different founder dilution outcomes when multiple SAFEs convert at the same round. Modern US startups should issue post-money SAFEs to match YC + Carta + AngelList tooling defaults.
• What is a valuation cap?+
  The maximum valuation at which a SAFE will convert to equity. If the next priced round is at a higher valuation than the cap, the SAFE converts at the cap (giving the investor more shares per dollar). If the next round is at or below the cap, the SAFE converts at the round price (minus any discount). The cap protects early SAFE investors from being diluted at very high valuations that reflect later-stage de-risking they helped enable.
• How much should I raise on a SAFE?+
  Pre-seed and seed-stage US startups typically raise USD 250K-2M on SAFEs before doing a priced round. The cap should reflect realistic next-priced-round valuations — typically your SAFE cap is 2-3× current revenue or product traction equivalent. SAFE investors expect their early bet to convert at a meaningfully better price than the round investors get, so caps should be set well below your aspirational Series A valuation.
• When should I do a priced round vs more SAFEs?+
  SAFEs are quick and low-friction but accumulate dilution opacity — too many SAFEs at different terms produce complex conversion math at the priced round. Most YC + Sequoia / a16z guidance: cap SAFE rounds at USD 2-3M total, then do a priced Series A. The priced round forces a real valuation, gives investors board seats and rights, and clarifies the cap table. SAFEs > 3 at different terms = mess; priced round = clarity at the cost of more legal work.
• Does this tool model option pool top-up?+
  Not explicitly. Most VC-led priced rounds require the option pool to be expanded BEFORE the new money goes in, meaning the expansion dilutes existing shareholders rather than the new investors (the "option pool shuffle"). To model this in this tool: set the starting option pool % to the post-expansion target (e.g., if you have 10% pool and Series A requires 20%, enter 20% as the option pool). The founder percentages will reflect the additional dilution from the pool expansion.
• What's the difference between SAFE and convertible note?+
  Convertible notes have interest rates (typically 4-8% annually) and maturity dates (typically 18-24 months). SAFEs have neither. Convertible notes are debt instruments that convert to equity at a priced round; if the round doesn't happen by maturity, the note becomes payable as debt (in theory — practically, most lenders extend rather than force the issue). SAFEs are not debt. For pre-seed and seed-stage US startups in 2026, SAFEs have largely replaced convertible notes because they're simpler. Convertible notes still appear at later stages or in specific tax-optimisation scenarios.
• What's a fair co-founder split?+
  Two-founder splits vary: 50/50 (most "equal partners" approach, simple but produces deadlock risk), 60/40 (most common, recognises one founder typically has more authority / contribution), 55/45 (compromise). Three-founder: 40/30/30 or 35/35/30 are typical. The big mistake: not negotiating this honestly upfront. Founder splits set 6 months in feel right; founder splits set 2 years in often produce resentment. Most early-stage VCs and YC + Sequoia / a16z guidance: spend a day discussing this honestly with co-founders before incorporating, then write it down.
• How does this work for non-US incorporated startups?+
  SAFEs are a US (YC) construct. Singapore startups can use SAFE-like instruments under Singapore law (called Convertible Agreement for Future Equity, or CAFE) — same math, different legal jurisdiction. UK uses Advanced Subscription Agreements (ASA) for similar early-stage equity. Many ASEAN-founded startups deliberately incorporate as Delaware C-corps specifically to use YC standard SAFEs — this signals US-fundraising readiness to YC, Sequoia, a16z, and provides operational simplicity for US-investor cap table management. The math in this tool works for any jurisdiction; the legal instruments differ.
• I'm an ASEAN founder using US SAFEs — anything specific to watch?+
  Three considerations. (1) Delaware incorporation: register a Delaware C-corp as your equity-issuing parent, with your ASEAN operating company as a wholly-owned subsidiary. This is the canonical structure for ASEAN startups raising US money. Carta supports it natively. (2) 83(b) election: file within 30 days of any restricted-stock grant — this is a US tax election that affects all parent-company stock regardless of where the founder lives. (3) Tax residency: if you're operating from Singapore but holding Delaware equity, you may have both US tax and Singapore tax considerations on grants and exit events — consult a cross-border CPA before any major liquidity event.

Related Tools