Two SAFEs signed months apart convert on the same day. Founders end at 74.94% — one no-cost ask on the term sheet moves it to 76%

The moment

Dispatchly is fourteen months old: a four-person shop in Austin, Texas — co-founders Naomi Reyes and Ethan Cho, plus two engineers — building scheduling and dispatch software for small trade contractors, the kind of six-truck outfits neither founder had run themselves before starting the company. There is a working product and eleven paying customers, none of it venture-backed money yet.

They raised twice before there was enough traction to interest a fund. Eleven months ago, a former manager of Naomi's put in $100,000 on a SAFE with a $4,000,000 valuation cap. Five months ago, a second angel — introduced by the first — put in $150,000 on a SAFE with a $6,000,000 cap. Neither carried a discount. Each felt like a small, private thing at the time: a wire transfer and a two-page document, months apart, nothing that needed modeling against the other.

It is now the third week of September. A seed-stage fund has sent a term sheet: $1,000,000 of new money at an $8,000,000 pre-money valuation, with a 10% option pool "to be established prior to the financing" sitting in one clause on page four, next to the boilerplate. Naomi and Ethan need to know, before they sign anything, what they will actually hold once the two SAFEs, the new round and the pool all convert on the same day — not what the $1,000,000 line by itself implies.

What they did instead

The instinct both founders had, independently, was to think about the two SAFEs as already settled and the term sheet as the only live document. The angels had been paid back in gratitude and a warm update email each quarter; the paperwork was signed, filed, and not something either founder expected to revisit before the next round. What was actually being negotiated, in their heads, was a single number: how much of the company the new fund's $1,000,000 would cost.

That framing skips the fact that a SAFE does not convert on the day it is signed. It sits, unconverted, until a priced round gives it something to convert into — and both of Naomi and Ethan's SAFEs, the new round, and the option pool clause all convert on the exact same day, against the exact same share count, the day this term sheet closes. Reading the two SAFEs as settled history rather than live claims on that day is the same mistake as reading a set of unpaid invoices as history because the work was finished months ago. The obligation is dated to when it was created; the effect lands on the day everything is totalled.

The pool clause got even less attention than the SAFEs. It read as a housekeeping line — funds always ask for one — and neither founder had a reason to think one placement of it in the document differed from another until the number was actually run.

The questions a CFO asks first

1. Once every instrument on the table converts on the same day, what percentage do the founders actually hold — not the percentage the new money alone implies?
2. Each SAFE was negotiated as its own event, months apart. Which kind is each one — does it fix its holder's share against the final total, or does it convert at a price and dilute alongside the founders?
3. The option pool is being created as part of this round. Whose side of the valuation is it coming out of, and is that negotiable?
4. If either the pool clause or a SAFE's own terms had been written the other way, how many percentage points would move — and is that a change still available to ask for, or a fact about paper already signed?

The arithmetic, shown

Same $1,000,000 raised at the same $8,000,000 pre-money valuation, same two angel SAFEs already on the books. Two versions of one clause in the term sheet, run through the tool before either founder signed anything.

Scenario one — the term sheet as it arrived. Both SAFEs are post-money: Angel A's $100,000 against the $4,000,000 cap fixes 2.5% of the company just before the round (210,526 shares); Angel B's $150,000 against the $6,000,000 cap fixes the same 2.5% (210,526 shares). The cap is measured on the company as it stands before the new money and before the pool is topped up, so both of those then dilute the angels along with the founders. The pool clause reads the standard way funds draft it — carved out of the pre-money, before the new investor's money is counted.

Two findings come back on this run. First: 2 post-money SAFEs do not dilute each other, because each one fixes its holder's percentage against the company just before the priced round rather than converting at a price — the protection from the other SAFEs is real, and the founders fund all of it. Second, on the pool: it is coming out of your side, carved from the pre-money the way this term sheet drafted it — the 10% dilutes only the founders and the two angels, and leaves the incoming investor's 11.11% untouched. The $1,000,000 of new money dilutes the angels too: their 2.5% each, fixed before the round, ends at 1.97%.

A third number sits underneath both findings: had the same two SAFEs been written as pre-money instead of post-money, the founders would hold 75.13% instead of 74.94% — a gap of 0.19 points, small enough that the tool does not flag it. With caps this far below the round's price the kind of paper matters little here; it matters more as the stack grows.

Scenario two — the one change asked for before signing. Same round, same two SAFEs, same 10% pool. The only change: the pool is created post-money instead of pre-money, spreading it across everyone who holds a stake after the round closes, incoming investor included.

Founders move from 74.94% to 76% — 1.06 percentage points, worth roughly $95,000 at the round's own $9,000,000 post-money valuation, on the same $1,000,000 raised at the same $8,000,000 pre-money price. The tool's own finding on this run reads: the 10% option pool is shared with the incoming investor. The concession costs the fund something too: their own line moves from 11.11% down to 10%, which is exactly why this ask is low-drama to make and, on this term sheet's first draft, still worth making — most drafts default to the founder-funded version because most founders never run the number to see it. The angels gain a little as well, from 1.97% to 2% each.

What changed

Naomi and Ethan sent the term sheet back with one line struck: the option pool would be created post-money, not pre-money. The fund's counsel agreed within a day — it is a common ask, not a contested one, once someone asks it. That single change moved the founders' post-conversion share from 74.94% to 76%, without changing the amount raised, the valuation, or either angel's SAFE.

The 0.19-point gap between post-money and pre-money paper on the two SAFEs already on the books did not move, because it could not: Angel A and Angel B's documents were signed months before this term sheet existed, and a SAFE's kind is fixed the day it is signed, not the day it converts. Naomi wrote it down as a note for the next round rather than a problem for this one — the next SAFE either of them signs gets a read of this same page before anyone decides which kind to use.

What the tool will not do

It will not say whether 74.94%, or 76%, or any other founder percentage is enough. Control of a company runs through board seats, protective provisions and the shareholders' agreement, not through a single number on a cap table, and this tool prices the stack, not the governance sitting on top of it.

It will not model a SAFE with no valuation cap and no discount. A handful of SAFEs are written that way, converting only against a future round's own price with nothing to compare it to today — this engine needs one number to convert against and refuses to invent one, so an uncapped, no-discount SAFE cannot be run here at all.

It will not price liquidation preferences, pro-rata rights, or any term in the actual financing documents beyond the percentage each instrument converts into. A term sheet with a 1x non-participating preference and one with a 2x participating preference can show the identical founder percentage on this page and mean very different things in an acquisition — this tool answers the ownership question, not the exit-proceeds one.

It will not tell either founder which kind of SAFE to sign next time. Post- money paper is easier for an angel to explain to themselves in one sentence and is protected from every instrument signed after it, which is exactly why it costs the founders more; pre-money paper shares the future dilution around. Which trade a specific founder should accept from a specific angel on specific terms is a negotiation, not an arithmetic answer, and this page stops at showing what each choice costs in points.