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Round mechanics

Post-money valuation

The pre-money valuation plus the new money invested.

Why it matters

Investor ownership is calculated against post-money, not pre-money. If you negotiate in pre-money terms but think in post-money terms you will consistently misjudge dilution.

A worked example

A $3M raise at a $12M pre-money is a $15M post-money, and the round buys 20%. The same $3M at a $12M post-money buys 25%, because pre-money is only $9M.

What is typical

Post-money SAFEs (the standard YC form since 2018) fix investor ownership at conversion, which means later SAFEs dilute founders rather than earlier SAFE holders.

Related terms

Pre-money valuation

What your company is agreed to be worth immediately before new investment goes in.

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Dilution

The reduction in your ownership percentage when new shares are issued.

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SAFE

Simple Agreement for Future Equity. An investor gives you money now in exchange for shares later, when a priced round happens.

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Run your raise on this

VCTerminal models these terms on your real cap table, so you can see what a term sheet pays you before you sign it.

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