Stacking post-money SAFEs

Post-money SAFEs are additive. Later SAFEs do not dilute earlier SAFE percentages; they dilute the common holders (founders and employees). If you sell three post-money SAFEs at 8%, 7% and 5%, you have sold about 20% of Company Capitalization as a block — not 8% with the later ones mostly eating each other.

The big idea

Labeled reserved seats are the picture. Seat A is 10%. Seat B is another 10%. The audience (founders) stands in whatever is left. The analogy breaks at Series A, when new money and a new pool shrink every reserved seat — covered in SAFEs into Series A.

Walking through share counts

Suppose founders hold 10,000,000 outstanding shares and there is no existing option pool. After both SAFEs convert, founders' 10,000,000 shares must equal 80% of the post-SAFE total:

Post-SAFE total shares T_safe = 10,000,000 / 0.80 = 12,500,000
SAFE shares total             = 12,500,000 − 10,000,000 = 2,500,000

SAFE A (10%): 0.10 × 12,500,000 = 1,250,000 shares
SAFE B (10%): 0.10 × 12,500,000 = 1,250,000 shares

Implied conversion prices (cash / shares):

SAFE A: $1,000,000 / 1,250,000 = $0.80 per share
SAFE B: $2,000,000 / 1,250,000 = $1.60 per share

Different caps → different prices. That is expected.

Including an existing option pool

If the company already has a 1,000,000-share unissued pool, those shares sit inside Company Capitalization. Founders' 10,000,000 plus pool 1,000,000 = 11,000,000 existing. With 20% SAFE ownership:

T_safe = 11,000,000 / 0.80 = 13,750,000
SAFE shares = 2,750,000

Founders still hold 10,000,000 shares, but their percentage of post-SAFE capitalization is 10/13.75 ≈ 72.7%, not 80%, because the pool already diluted them. Always put the real pool in the denominator.

SAFE A's 10% is fixed relative to Company Capitalization that already contemplates other convertibles. When SAFE B shows up at another 10%, the pie slice for common shrinks. SAFE A still gets 10% of that capitalization at conversion — not 10% × (1 − B).

Common mistakes

• Thinking later SAFEs dilute earlier SAFE holders. On post-money forms, they do not.
• Skipping the existing pool in the denominator. Founder % is then too high.
• Celebrating 80% after SAFEs when a 1M pool already sat in the cap table.

Check yourself

Two post-money SAFEs at 10% each, 10,000,000 founder shares, no pool. How many SAFE shares in total?

2,500,000. T = 10,000,000 / 0.80 = 12,500,000, and 20% of that is 2,500,000.

Why are SAFE A's and SAFE B's conversion prices different ($0.80 vs $1.60) if both own 10%?

Different dollars and different caps; same percentage of T still implies different cash-per-share.

Key takeaways

• Post-money SAFE percentages stack; common absorbs the next one.
• T = existing / (1 − sum_SAFE_%), then pct × T shares per SAFE.
• Put the existing unissued pool in existing before you quote founder %.

Further learning

Next, cap vs discount at conversion.