As Y Combinator's Demo Day takes place next week at Pier 48 in San Francisco, its largest group of companies are preparing to present themselves to an audience of select investors. I took Atrium through the demo day myself and I know the process first-hand. When the founders have finished their pitches, the time for the conversation with the numbers will follow closely. Among the many decisions that founders are facing at this time, the decision to choose Pre-Money SAFE or the new Post-Money SAFE, the two standardized legal documents, the YC in recent years Years ago.
Both versions are meant to make the process for both parties in the early-stage fundraising process fast, easy and fair. However, there are crucial differences between the two, which founders should carefully consider.
Basically, the Pre-Money SAFE is extremely beneficial to start-ups, as it receives the pre-rated funding like a convertible, but is debt-free. The post-money SAFE sweetened some of the conditions for investors, such as the subsequent acquisition of a percentage price round.
Overall, we expect the post-money version to become more general, especially if the company makes a capital increase of over $ 1
(Note: This article is intended to provide founders a general understanding of the changes made by Pre-Money SAFEs Post-Money SAFEs: The information provided is based on my professional experience and opinions and should not be subject to careful consideration and advice In addition, learn more about Pre- and Post-Money SAFEs issues, visit me on April 16 for a webinar that will immerse myself a little deeper.)
Two structures to enhance Startup Investment
Today there are two general ways to structure a startup fundraising round. The first can be referred to as the "fixed price round" and is characterized by the sale of fixed stock preference shares.