The short answer
Post-money valuation is the value of your company immediately after a new investment, which equals the pre-money valuation plus the money raised. It's the number that tells you what percentage new investors own: their investment divided by the post-money valuation.
- Post-money = pre-money + new investment.
- Investor ownership = investment ÷ post-money.
- Post-money SAFEs state the cap as a post-money figure, so ownership sold is easy to calculate.
- Several post-money SAFEs dilute the founders, not each other.
How it works
If an investor puts $1M into a company at a $5M post-money valuation, they own 20%, because $1M ÷ $5M = 20%. The pre-money valuation in that case was $4M.
The same idea drives the post-money SAFE. Y Combinator explains that its valuation cap is "post-money," meaning it's the company's valuation after the SAFE money is included. That makes the ownership sold transparent: amount ÷ cap. YC's example: targeting a $1M raise while selling 15% gives a post-money cap of about $6.7M, or $5.7M pre-money.
Worked example (hypothetical)
| SAFE | Amount | Post-money cap | Ownership sold |
|---|---|---|---|
| Angel A | $200,000 | $6M | 3.3% |
| Angel group | $300,000 | $6M | 5.0% |
| Micro-VC | $500,000 | $8M | 6.25% |
| Total | $1,000,000 | about 14.6% |
Each SAFE's percentage is fixed by its own cap, so the founders absorb the combined dilution (before the priced round adds more).
Common mistakes
- Mixing pre-money and post-money numbers in the same conversation with investors.
- Assuming SAFE holders share dilution with each other on a post-money SAFE. They don't; founders absorb it.
- Forgetting that the priced round's new money and any new option pool dilute everyone again on top of the SAFEs.
A simple habit fixes most of this: before every investor call, update your cap table and know your fully diluted ownership after the round you're raising.
Why it matters to a pre-seed founder
Founders raising in small checks over months can stack SAFEs without noticing how much they've sold. Keep a running table like the one above, and talk in post-money terms with investors so everyone is reading the same number. See pre-money valuation and valuation cap.
Frequently asked questions
How do I calculate post-money valuation?
Add the amount raised to the pre-money valuation. A $2M raise at an $8M pre-money valuation gives a $10M post-money valuation.
Why did Y Combinator move to post-money SAFEs?
YC says the biggest advantage is that the ownership sold is immediately transparent and calculable for both founder and investor.
Does the post-money cap include the new option pool?
Per YC's SAFE FAQ, the post-money cap is post the options existing before the priced round, but not post a new or increased pool created in that round.